Leasing a car for your business is a sensible decision. If you’re a small business or start-up, leasing a car would come in handy due to lower costs, easy availability, and other benefits. This article briefly explains the benefits of leasing a car for your business.
Monthly payments
If you buy a car – new or used, you will have to pay cash in advance in whole or in part. On the other hand, when leasing, you only have to pay for part of the residual value. This results in a lower monthly payment.
In addition, the total cost of leasing a car is lower than when buying because the lease term is short (usually three years). The leasing costs are the present value of the car minus its value upon return. You must pay the calculated interest and fees for the services. If the value of the car is higher than expected on your return, you will have to pay less.
It’s better value for money as you can afford the car at a lower price under a flexible payment plan.
Tax deduction
The taxes you pay go down because you only have to pay for the value of the car you use. In addition, the amount of interest is spread over several months, resulting in a lower monthly amount.
In addition, since you have the benefit of a tax deduction for leasing a car, it helps to save a few hundred dollars.
Less maintenance
You will receive the leased car with full warranty from the manufacturer. This ensures effective refurbishment maintenance if required. If you lease the car for a short period of time, you probably have less maintenance inconvenience.
GAP Insurance (Guaranteed Asset Protection)
When you lease a car, you benefit from GAP insurance. GAP insurance is part of the leasing contract. GAP insurance covers the remaining part of the value of the vehicle that you pay in the event that it is stolen or completely damaged in a vehicle collision. This value is far smaller than that of purchased new/used vehicles. For a small business like yours, it’s important to take note of this.
Call option
You lease the car for your business and use it for as long as you like. At the end of the leasing period, you need to hand over the car to the dealer. Now you have the opportunity to buy the car – lease a new one or another. You don’t have to worry about reselling the car.
As a small business owner, your business is vulnerable to business fluctuations for a variety of reasons. Under the circumstances, every dollar you spend is substantial. So when it comes to running a car for your business, leasing can be an optimal option.
business car finance
#Benefits #leasing #car #businesses
Wendy is now a financial analyst and writer. Wendy has been writing about finance and personal finance since she was a sophomore in high school. She has also been writing for several online publications and published in The Huffington Post, and Forbes Woman.
Wendy is a credentialed financial analyst and has experience working with financial institutions and businesses. Wendy is also a certified financial planner. When Wendy's not writing, she enjoys tending to her many plants, watching TV, and spending time with her family.
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