You can always lease a vehicle for a variety of good reasons. The situation has become even more prevalent nowadays. While many companies are preparing for a bumpy restart due to the Covid-19 pandemic, the economy is held, hostage. We must focus entirely on core activities to emerge from the crisis intact over the next few months. You can employ the operational leasing of your fleet as one of your weapons. You need to find the best van leasing company in your city.
Buying vs Leasing a Vehicle
The dealer leases you the vehicle for a certain period. Most leases have a term of 36 to 48 months. Upon expiration of the lease, you can return the vehicle to the dealer or purchase it at a predetermined price, as defined in the lease contract.
Buying a car is very different from that. You are the owner when you buy it outright once the loan is paid off.
Is purchasing a car always the right choice? Leasing a vehicle is a better option for many people than buying one. Instead of purchasing a vehicle, you lease it and pay for it to be used for a specified period.
Flexibility Is The Plus Point
In the months ahead, many companies will face major challenges. In addition, some adjustments may have to be made when it comes to fleet management, and there is where flexibility comes into play. Despite this crisis, Leasing companies are developing short-term solutions while keeping the long-term picture in mind. Even in difficult economic times, Leasing companies’ operational leasing service works.
What Are The Disadvantages Of Leasing?
Leasing has the disadvantage of not building equity over time as you make lease payments. It is possible to end a lease early, though early termination usually involves a cancellation fee.
What Are The Advantages Of Leasing?
If you lease the same make and model of car, the payments are relatively stable, and you can get a new car every few years if you wish. Additionally, leasing eliminates the need for the lessee to dispose of the car at the end of the lease term by selling privately or trading it in for another vehicle.
Below are the 5 good reasons to choose leasing over buying one.
Cash Is King
From an economic perspective, you should always keep track of your cash flow when you are in a crisis. You can choose an off-balance-sheet construction when using operational leasing with or without an advance. As a result, your company’s financial resources can be allocat to its core activities.
Fixed Monthly Costs
Opting for operational leasing means that your monthly fees are fixed, so you won’t be surprised by unexpected charges. Furthermore, Leasing companies take care of everything regarding your fleet, so you have lower administrative costs. You can concentrate on what you do best instead of worrying about everything else.
Tax Optimization And Total Cost Of Users (TCU)
Carbon dioxide emissions are the primary factor considered when taxing company cars. The consequences for companies (tax deductions, for example) and their employees (benefits in kind) are significant. Ensuring that operational requirements align with tax optimization and TCU (kilometres driven and consumption, etc.) is a complex balancing act that Leasing companies can help you with.
Your Risk Doesn’t lie In The Residual Value.
If your company purchases its vehicles, you have to sell them when they reach the end of their life cycle. Due to changing ecological taxation rules in the sales market, it takes a lot of expertise to calculate the correct residual value today. What’s more, selling a car is not only a logistical and administrative burden but entails a financial risk. A leasing company bears the entire risk of operational leasing.
Leasing Offers Significantly Lower Payments
Since the car’s value is leased for the period during which it is used, lease payments are typically lower than finance payments. As a result, lease payments are more palatable from a cash flow standpoint.
Generally, leasing is a good financial option if you plan to replace the vehicle within the next few years. Usually, financing makes more sense if you plan on keeping the vehicle for an extended period.
