Car leasing is one of those things that many businesses consider but never actually follow through with. However, there are a number of benefits to leasing an auto or for that matter autos for your business – let’s have a look.
Lump Sums
The fact that you never have to put down a large lump sum can be a tempting reason to involve yourself in car leasing over that of car buying. Car leasing requires you to pay a monthly fee to the car leasing company each and every month in a similar way to that of your mobile phone contract.
When your rental is up, usually in between 2-4 years, you simply change the car without hassle. This means you don’t have to sell it at a loss, or pay a sum to purchase it outright. This can be a significant benefit for businesses that have a number of cars and won’t want the burden of caring for them when the payments are up.
Depreciation
Depreciation is a significant factor here and can really be crippling. As some cars are more likely to depreciate than others, this may often push a business into purchasing a car with lower depreciation, over that of a car they desire. With car leasing this is not the case and your business can have the car you want for the cost of the monthly lease.
Warranty
Of course, one of the other issues of having to buy a car is that you also have to look after it. Wear and tear can be costly and when a car ends a warranty and the problems start rolling in, it is then you realise the cost of such issues. Leased cars are under a warranty, usually the manufacturers as they are seldom old enough to go out of warranty. This means that there is no break down costs, no need to have to fork out for expensive parts and no putting your hand in your wallet should something go wrong.
Repayments
As you are not purchasing the car at the end of the term and the car leasing company will continue to own It, most car leasing and contract hire has lower monthly repayments than that of a hire purchase or bank loan. If you run from one lease to the next lease you get a car for a much lower cost. This allows you to rent a premium car, such as a BMW or Mercedes for a much lower cost than you would buy it.
Car leasing is a sensible option for businesses who will continue to lease for a number of years and can really be a positive for business costs.
Cormac Reynolds works for First Vehicle Leasing a UK contract hire company.
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