Leasing a car for your business is a sensible decision. If you are a small business or a start-up, leasing a car would be helpful due to lower cost, easy availability, and other benefits. This article briefly discusses the benefits of leasing a car for your business.
monthly payments
In case you buy a car, new or used, you must pay cash in advance in whole or in part. On the other hand, in the lease you have to pay only a part of the residual value. This leads to a lower monthly payment.
Also, the total cost of leasing a car is lower than buying it because the lease period is short (usually three years). The cost of the lease is the current value of the car minus its value when you return it. You must pay the interest charged and the charges for the services. If the value of the car when you return it is more than expected, you should pay less.
It’s a better value for your money, since you can pay for the car at a lower price with a flexible payment plan.
Tax deduction
The taxes to pay are reduced because you only have to pay for the value of the car you use. Also, the interest amount is spread over several months, resulting in a lower monthly amount to pay.
Plus, since you’ll have the benefit of a tax deduction for leasing a car, it helps save a few hundred dollars.
less maintenance
You get the rented car with a full manufacturer’s warranty. This ensures effective corrective maintenance when necessary. Plus, since you’re leasing the car for a short period, you’re likely to have fewer maintenance hassles.
Secured Asset Protection (GAP) Insurance
By leasing a car, you get the benefit of GAP insurance. GAP insurance is part of the lease. GAP insurance covers the remaining part of the value of the car that you must pay in the event that it is stolen or completely damaged in a vehicle collision. This value is much less than that of purchased new/used vehicles. For a small business like yours, it’s important to take note of this.
Purchase option
You rent the car for your business and use it for as long as you like. At the end of the lease period, you must return the car to the dealer. Now you have the option to buy the car, a new one, or lease another one. You don’t need to worry about reselling the car.
As a small business owner, your business is prone to business fluctuations for a number of reasons. Given the circumstances, every dollar you spend is significant. Therefore, when it comes to operating a car for your business, leasing can be an optimal option.