Are Car Leases A Sound Financial Option For Your Company?
Car leases are beneficial and can really save on costs. The problem is a lot of people don't really believe in car leasing. Buying a car and vehicle leasing both have their own advantages and disadvantages, so you should consider your needs wisely.
Having a car and lease is beneficial to all sorts of businesses. When you buy a car, you will need to make a down payment. When you lease a car, however, you won't need to make any upfront payments to the dealer. It's also cheaper if you lease car within the warranty period, since you'll be able to save on repair costs. Hence, in case of any damages they are catered for by the manufacturer.
In order for a business to buy a car or they in most cases have to acquire a loan and this will affect their gearing level. A business that opts to lease a car will also pay lower monthly payments. Since you're not paying for the entire car, just for its use, you will have lower fees. This will help to reduce the cash outflows leaving you with some cash for other issues. Compared to buying a car, you also won't pay such a large upfront payment.
On the other hand in case of an accident or the vehicle is stolen, the car lease pays off the vehicle automatically. You can avail of automatic gap protection when you get a lease, unlike when you buy a car. This gap protection is very important because it pays for the difference between the amount of money remaining in the lease and the actual worth of the vehicle that incurred an accident or was stolen. Most people do not realize that when an accident or theft of a vehicle that had been bought on a loan is covered for by an insurer, one is still left with the burden of the remaining sum to the finance company.
When you lease a car the money that would have been the monthly payments can be put to other uses like investment of tents. For example you can put those funds to stocks or mutual funds and with time they will increase in value or you can put the money into other general expenses instead starting to hustle for other funds to cover the same. Another cheap option with vehicle leasing is that someone can take over somebody's car lease that is in existence. It is cheaper than buying or even going for a new lease. This also helps to escape the initial hassles or fees and other negotiations. In fact lesser firms allow this practice and may only charge a little amount of money to facilitate this transfer. You can also expect lower taxes with a car lease, since it's spread over a longer time period. If these benefits sound great to you, maybe it's time to consider getting a car lease.
by: Dirik Hameed