If you’re looking for a vehicle for your business, should you buy or lease? We examine the pros and cons of leasing a vehicle for your business and see which might be right for you.
Business is booming, and you’re now ready to acquire a company vehicle.
But there is a small problem. You don’t know if you should buy or lease a car.
As a business owner, you want to ensure the choice you’ll make help you cut your expenses and improve business operations.
Which option should you go for? What are the auto leasing pros and cons?
In this piece, we’ll look at the pros and cons of leasing a car for your business and help you make the right choice.
What Are the Pros and Cons of Leasing a Car?
We’re going to start with the benefits of leasing a vehicle for your business. Here they are:
One of the advantages of leasing a car is low cost.
The initial amount of money you’ll pay when leasing a car will be lower than the down payment you’ll be required to pay when buying the same vehicle.
The monthly lease payments will also be low.
Besides, you’ll also be able to receive tax benefits if the leased company car is used for business purposes at least 50% of the time.
Leasing a car will save you money, which you can use to grow and propel your small business to new heights.
Capturing Your Clients’ Attention
Today’s clients only work with well-established, moneyed businesses.
You, therefore, have to create the impression that your business is reliable and well-established.
Leasing a new company car from a reputable company like Swiss Vans lends some legitimacy to your business and makes it look bigger than it is.
It also helps you capture people’s attention, making it easier to sell your products or services.
When you buy a car, you’ll be required to spend more money to keep it in good condition. This is expensive and can ruin your business.
With leasing, however, there are minimal maintenance or repair costs.
You can also switch to another car easily and quickly if you note that maintenance and repair costs are eating into your cash flow.
At the end of the lease cycle, you don’t have to worry about selling the car.
Cons of Leasing a Car for Your Business
Let’s now look at the disadvantages of leasing a car.
It’s Expensive in the Long Run
Leasing a vehicle is a great way to save money and meet your immediate business needs.
You should, however, note that leased car will cost you more in the long run than purchasing a vehicle.
But that’s not all.
If you lease a car, you’ll have no ownership rights; this means that you’ll have nothing to show for all the money that you spend when the lease cycle comes to an end.
There are also hidden charges associated with leasing and you may find yourself paying more than you expected at the end of the lease cycle.
For this reason, you need to understand the things to consider when leasing equipment.
Leasing a car comes with limitations.
For instance, there are some lease agreements that restrict any kind of customization. This makes it hard for you to show off your company’s culture.
Even if your lease agreement allows customization, you’ll still be forced to spend money to repaint the vehicle before you return it.
Simply put, the limitations that come with leasing may negatively affect your business.
Now that you know the pros and cons of leasing a car, which option should you go for?
Before making a choice, ensure you read and understand how the pros and cons will affect your business. Also, ensure your decision is based on your current and future business needs.
You can check out our blog for news and informative posts about issues affecting small businesses.