Commercial Advantages of Vehicle Leasing
Many businesses follow a traditional path, buying their vans and cars from local automobile dealers. Local garages and businesses are often favoured because they are in the right place to provide timely servicing and maintenance. Business will usually negotiate a significant discount due to the quantity of vehicles required and the ongoing business they will be providing to the supplier.
But the challenging economic climate is forcing many businesses, big and small, to rethink the way in which they finance their transportation needs.
Cost-cutting is what the accountants and finance departments want, but this must be carried out without any impact on the businesses ability to continue to operate profitably. Many businesses are cutting back on their company car provisions. Instead of providing their executives and sales people with their own dedicated company car, bought from the local dealer, many are turning to company car leasing arrangements. Some businesses are now using a car pool of leased vehicles rather than providing dedicated company cars.
It is estimated that as much as 20 to 60% can be saved by leasing rather than purchasing vehicles for business.
The same approach has been adopted by many companies requiring commercial vehicles. Leasing vans and trucks is not new to business but was previously primarily used by larger organizations. Many business are resorting to automobile leasing as a way to cut their regular transportation costs during the current recession.
Businesses can take advantage of the many advantages that leasing can provide. There are some potentially significant tax advantages, the initial outlay is minimal and cash flow is helped by the fixed, known monthly payments.
One of the main disadvantages is that the business never actually owns the vehicles which remain the property of the vehicle leasing company. Another potential disadvantage is that you must generally estimate the anticipated mileage and if this is exceeded significant costs can result.
If you are a business, of any size, you would do well to research how much you could potentially save and the advantages that vehicle leasing could bring to your business.
