Advantages of leasing a car for business

Leasing a car for your business is a wise choice. If you have a small business or a start-up, leasing a car would be convenient because of its lower cost, easy availability, and other benefits. This article briefly discusses the benefits of leasing a car for your business.

Monthly payments

When you buy a car – new or used – you have to pay for it in whole or in part in cash. On the other hand, with leasing you only have to pay part of the residual value. This leads to lower monthly costs.

Furthermore, the total cost of leasing a car is lower than buying it because the lease term is short (typically three years). The lease price is the cash value of the car minus the value upon return. You must pay the interest and fees charged for the services. If the return value of the car is higher than expected, you will have to pay less.

It is better value for money as you can pay for the car at a lower price under a flexible payment plan.

Tax deductions

The taxes to pay decrease because you only have to pay for the value of the car you use. Furthermore, the amount of interest is spread over several months, resulting in a lower monthly payment amount.

In addition, because you benefit from a tax deduction for leasing a car, it helps you save a few hundred dollars.

Less maintenance

You receive the lease car with a full manufacturer’s warranty. This ensures effective corrective maintenance when required. In addition, since you lease the car for a short period, you probably have fewer maintenance inconveniences.

Guaranteed asset protection (GAP) insurance

When leasing a car, you benefit from GAP insurance. GAP insurance is part of the lease. GAP insurance covers the remaining portion of the car’s value to be paid by you in the event of theft or complete damage in a collision. This value is much less than that of purchased new/used vehicles. For a small business like yours, it’s important to keep this in mind.

Purchase option

You lease the car for your company and use it for as long as you want. At the end of the lease period, you must return the car to the dealer. Now you have the option to buy the car – lease a new one or another. You don’t have to worry about resale of the car.

As a small business owner, your business is prone to business fluctuations for several reasons. Under the circumstances, every dollar you spend is significant. Therefore, leasing can be an optimal option when it comes to running a car for your company.