Choosing Your Next Business Car: Why Leasing Might Be Better than Buying
Choosing a new car is always exciting, irrespective of whether it’s for commercial or personal use. However, when you’re making your selection with the former purpose to consider, it becomes less about your individual preferences, and more about making the choice that will be best for your business.
With this in mind, a lot of people find that it’s more advantageous to lease a commercial car from a company like John Clark leasing than it is to buy one. This essentially provides you with a long-term rental of the vehicle, with most maintenance costs included as part of your package.
If you’re busy weighing up which of the two would be better for you, here are a few points that you ought to consider…
#1: You Won’t Need to Tie Up as Much of Your Business Capital
When it comes to choosing between buying and leasing, much of your choice will be based on personal preference, and something that you’ll need to ask yourself early on is whether you would prefer to make a single lump sum payment, or else spread the outlay across a period of time. For those who favour the latter, leasing is by far the better option, as it means that you won’t have to tie up as much of your business capital in one go. Instead, you’ll be able to put aside a specific fund to cover your costs each month, leaving money spare to invest in other areas of your venture.
#2: Your Running Costs Will Be Lower
There is also an argument that leasing helps to lower your running costs. There are two main reasons for this. Firstly, leased cars are usually, although not always, new vehicles, and thus less prone to problems arising from wear and tear. Secondly, many of the maintenance costs associated with vehicle ownership will be covered as part of your leasing package, reducing the amount that you’ll need to spend to keep your car on the road.
#3: You Can Claim a Tax Deduction
Thirdly and finally, leasing will often allow companies to claim a tax deduction and VAT relief. Provided that your CO2 emissions are below 130g/km, the associated corporation tax benefits tied to leasing will enable you to offset 100 per cent of the cost of your rental against company profits, thus lowering your annual tax bill. Even if emissions exceed this figure, you’ll still find that you can deduct 85 per cent of your total cost, which amounts to significant savings.
If you’re ready to choose your next business car, could leasing work for you?