Business car leasing for more business profits

Posted by SharonEvans on February 15th, 2014

When you consider car leasing deals in the UK don’t just think about private car leasing. There are many businesses that lease cars for a couple of years or more. For businesses it makes a lot of sense to lease cars, both from the strategic point of view as well as from the financial point of view. In this article we have concentrated on the financial benefits of business car leasing. If you as a business owner are thinking about leasing a car or a fleet of cars then these points should help you arrive at a decision.

When someone buys a car the value of the car starts decreasing the moment it rolls out of the showroom. This is due to depreciation. Every car is depreciated year on year and the commonly taken depreciation figure is 20%. When you buy a new car for your business instead of opting for business car leasing you spend money on a depreciating asset. Your accountant may tell you that this is a waste of money. When, on the other hand, you opt for one of the car leasing deals you don’t have to worry about the depreciation figure.

With business car leasing you can free up a lot of your cash flow. A brand new car is definitely going to cost you more per month than a brand new car that you leased for your business. And you really don’t need to lease a brand new car for your business. As long as the car is in tip-top condition you’re good to go. You will need to make a smaller down payment and the payment per month is also going to be lower.

Credit worthiness is an important aspect for any business. Opt for a car loan and you engage your credit line. When you try for a business loan the lender is bound to consider how much you pay for your car loan and you may end up getting a lower loan sanction than what you had in mind.

Now consider the tax aspect of car leasing deals for your business. You must keep in mind that on 1 April 2013 a new tax rule has come into force that allows businesses to offset the full amount of their business car leasing payment against the tax they are supposed to pay. The only point to keep in mind here is that the car should be below the threshold of 130g/km. There is no limit on the capital cost of leasing the car.

With the best car leasing deals you have manufacturer warranties, road taxes, insurance premium payments and maintenance packages included. This means there is no hassle for you as drive around in your leased car. And of course, when the lease comes to an end you can immediately switch to a new car.

When you consider the top car leasing deals you will agree that business car leasing makes more sense for your business than buying a company car.

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