Over the past few years, corporate auto leasing has become an even more viable alternative to purchasing, as new tax benefits have made leasing an even better alternative and as new benefits are emerging with the rapidly growing economy. This is why more and more businesses are turning to corporate vehicle leasing to handle their transportation needs.
With that in mind, here are a few ways that your business may be able to benefit from a properly structured lease agreement from a corporate auto leasing company:
- Tax Benefits As mentioned earlier, corporate auto leasing can provide significant tax benefits for businesses, depending on the type and terms of the lease. Now, many car expenses are deductible, including gas mileage, maintenance, inspections required by the government, and even some replacements (tires, brakes) that are due to normal wear and tear. These deductions can add up to significant savings – and in some cases, provide enough savings to justify leasing over purchasing.
- Lower Administrative and Maintenance Costs License fees, taxes from multiple sources, auto maintenance and repair expenses, and costs related to depreciation are all costs that companies must incur who have their own fleet of cars. With a lease, these expenses are typically covered by the leasing company. The leasing company also handles other management tasks, including record keeping and routine paperwork – thus reducing the pressure on your company to maintain these mandated records.
- Convenience Simply put, a reputable auto leasing company will take almost all of the headaches – real and potential – out of operating a vehicle or a fleet of vehicles. The whole idea of the lease is to trade the hassles associated with owning a vehicle by passing these on to the leasing company- who are experts at what they do. The result is a greater convenience for your business – so you can focus on your business.
- Greater Cash Flow Options Since leasing requires a smaller up-front investment than purchasing, businesses that lease their vehicles have greater cash flow options than those who purchase their vehicles. Often, companies must use their own capital or they must obtain a sizable loan to purchase vehicles. This can cause their credit line and their bottom line to take a significant hit.
- Predictable Expenses Leasing allows businesses to package their vehicle costs into a predictable monthly operating expense. Owning a vehicle or fleet of vehicles brings with it all sorts of variable costs – making budgeting a more difficult endeavor.
There may be additional benefits to your business than just those listed here. Also, the degree to which your business may benefit from the list above will vary depending on the type of lease agreement you have. Your corporate auto leasing agent or company should be able to advise you on which type of lease provides the greatest overall benefit to your company.