Why should business owners go with leasing over owning company vehicles? Buying a car means you have to pay a loan over a specified period of time, and you will have to pay this loan even if the value of the car drops below the amount on the loan. The most common scenario where this can arise happens when the car crashes.
Despite the accident, you still have to pay. Car leasing differs in the sense that the residual value towards the end of the lease can actually lower the overall cost to you. Here are some reasons why leasing company vehicles may give you better advantages.
Reason #1: Tax Benefits
Every business owner understands how important tax deductions are. You should first speak with your tax representative, but in most cases, you can deduct this. However, you will have to prove you drive the company vehicles a minimum of 50 percent of the time for work-related service.
The car leasing payments can be deducted, but with car ownership, only the interest on the car loan can be deducted.
Reason #2: Easy to Stay Competitive
With car leases, you can remain competitive over the long term because as the car gets outdated, you can simply choose a newer model. This looks good for your business image. In addition, you can often upgrade to a newer vehicle if the need arises for a newer and more updated vehicle.
However, when you buy a car through a car loan, you can't upgrade as easily because you've locked yourself in on the car.
Reason #3: Easier to Get Approval
Ever tried to get a loan from the bank? If so, you know how hard it can be with mountains of paperwork, and even then, you don't know if you were approved or rejected until seven days later, and in some cases, it can take even longer. With leasing, there's no such red tape. Many times, you can get approved within 24 hours, depending on the leasing company.
Reason #4: Lower Payment Than on a Car Loan
Especially for a startup business having trouble raising the capital, the payments on a lease will normally cost less than what you pay for a car loan. You can save some extra cash this way to raise it for more important things. Buying versus leasing often has different price points in the overall scheme of things for a business.
Reason #5: More Preferable as the Price Goes Up
The higher the pricing of the car, the more favorable a lease because if you need more access to cash each month, leasing gives you a way to do it. Also, at the end of the lease, you can buy the car, depending on the type of lease you signed.
Reason #6: Most Leases under Warranty
Because most leases cover three years, your vehicle will almost always have coverage under warranty, which is super useful if you've ever been in the situation where you had to use it.
Reason #7: No Hassle of Selling It
Once it's time to move on to the next vehicle, there's no time spent worrying about how to sell your car. Instead, the car goes back to the leasing company, and you're free to pick a better, more updated car. In some cases, you can decide to buy the car at the end of the lease for a fair market price, but you can also leave it as it is.
If you'd like to learn more about leasing a dependable fleet of company vehicles, contact us today! Wilmar Inc. works in the best interests of the client, and we have been around since 1980.
Our business philosophy is to always do what's within the best interests of customers because we value your business, and we want you to stick with us. The leases on our vehicles reflect the differing depreciation rates of each brand. Try to find that with any other leasing company.