Vehicle Leasing Advantages For Business
11:40 pm Guest Author
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Many businesses follow a traditional path, buying their vans and cars from local automobile dealers. Locally based garages are generally favoured as they are idally located to provide servicing and maintenance when required. 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.
The current recession is prompting many businesses to look at alternative ways that they can provide and finance their transport needs.
Accountants and finance departments want to cut costs but, obviously, this must be achieved without any impact on the profitability of the business. 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 has been estimated that the leasing approach is saving businesses between 20 and 60% when compared to their previous transport costs.
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. Today’s challenging economic downturn has resulted in many small and medium sized enterprise choosing to lease their vans, refrigerated trucks and minibuses rather than buy.
Businesses can really benefit from the many advantages that leasing provides over outright purchase. There are tax advantages for most businesses and the fixed monthly payments help accountants to budget their transport costs.
One of the main disadvantages is that the business never actually owns the vehicles which remain the property of the vehicle leasing company. Another disadvantage is that you must generally agree the prospective annual mileage when taking out the lease contract.
If you are looking at ways to save costs for your business it is recommended that you compile the details of all of your business transportation requirements. This would include all of the company cars, vans, trucks and commercial vehicles that you use. Look closely at the annual mileage for each vehicle along with the annual servicing and maintenance charges. Also, take a look at your accident records to see how ofent you’ve had to make claims on your insurance. Armed with this information approach at least three of the top vehicle leasing firms in your area and get some quotations. The automobile industry is suffering more than most and this is encouraging many vehicle leasing firms to offer significant discounts over and above those quoted from their websites. If you have a potentially substantial vehicle leasing requirement you are likely to be offered a very attractive deal.
If you are in a business that needs to cut costs you would do well to look into the potential benefits of vehicle leasing.
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