Business vehicle leasing has indeed become one of the most sought-after deals for business enterprises today, and it has a lot to offer in terms of cost-savings, easy maintenance and repair, and a chance for businesses to have access to new vehicles without having to worry about their depreciation. When you go for a contract hire arrangement, all you have to do is decide on the terms of your contract (the duration and the annual mileage, for instance) and choose the vehicles you would like to use. The terms are straightforward and clear from the beginning, and you can also benefit from a fixed monthly fee that allows you to plan your budget accordingly. But what else can you expect from a vehicle leasing agreement for your enterprise? Here’s a comprehensive list of the real advantages of car leasing for your business.
- Lower expenditures
One of the key aspects that attract many business owners to vehicle leasing is the lower expenditures associated with it. First of all, it doesn’t come with a high initial deposit, so you don’t have to worry about spending your funds for a deposit on an asset that will undoubtedly depreciate over time. There is a big difference between buying a vehicle and leasing one, and the difference only begins with the lower costs associated with leasing.
- A fixed fee
As already stated, business contract hire and leasing arrangements come with a fixed monthly fee. This means you can easily arrange your budget so you can accommodate this fee, and it will not fluctuate or change during the duration of your term. Many businesses appreciate this because it allows them to carefully plan their budget and ensure they have enough cash flow. The fixed fee will often already include the actual vehicle lease plus maintenance and service, and sometimes it even covers road tax. Whatever budget you need to allocate for your monthly payment is easy to allocate, and you can work out your other expenses more easily. With this fixed fee, you can make sure you are prepared for other expenditures well in advance, and you can use the money you save to invest in your business’ growth.
- Less risk
Once you sign on the dotted line of a business vehicle lease, you will agree on an estimated depreciation level for the vehicle. Whatever depreciation will occur on the vehicle will not have any impact on your contract. Since you don’t own the car in any way, you will not have to be concerned about how to sell it once your term ends. All you have to do is give it back. What’s even more remarkable about this arrangement is that you can go for another leasing deal on a new model on the same day you return it.
Last but certainly not least, you can benefit from claiming back your lease expenses on your VAT. Some business owners may not be aware of it, but if you lease a vehicle solely for use in your business, you may be able to claim 100% of the VAT on it. And even if you utilise the vehicle for both business and personal use, you can still claim approximately 50% of your VAT on the vehicle.