Sponsored by Intelligent Van Leasing:
It’s one of life’s most difficult decisions from both a personal and a business perspective — should you buy a car or should you lease one? When it comes to business, leasing has many advantages. It can save your business money and help you look more professional and successful since you or your employees will have access to newer cars. Here are some of the key advantages of business vehicle leasing.
Fixed Cost motoring for your business
According to surveys the costs of maintaining a car is an estimated £707 per year in the U.K. While leasing a car doesn’t necessarily mean that there won’t be maintenance costs on your vehicles, it does greatly minimize the risk because leased cars are newer. That means the chances of something going wrong are greatly reduced. You also know exactly how much you’ll be paying each month for your lease agreement, which will last for a period of between two to four years. You won’t have to worry about interest rate increases.
Better Cash Flow
Leasing a vehicle does require a small deposit. but after that, you just have the regular monthly payments to make. This is very different from purchasing a car where you have larger deposits to pay as well as payments that may vary in relation to interest rates and loan duration. When you’re ready to purchase a new car, you also have to account for selling your old one before paying a deposit for a new one. This can have an effect on your cash flow and accounting practices. For more information on accounts read this post on accounting terms that your business needs to understand.
Access to New Cars at Fleet Discounts
Leasing is a really effective way of getting access to newer and better vehicles at a cheaper price. This has obvious cost benefits to your business, and it helps you or your employees make better impressions with potential customers, vendors, and business partners. For example, take a look at the range of vans that Intelligent Van Leasing has to offer to see how better vehicles can become more affordable when you lease.
VAT Benefits
When you lease a car in the U.K., you’re able to claim back some or all of the VAT that you pay on both the deposit and the monthly payments. You’re able to claim 100% of the VAT as long as the vehicle is only used for business purposes. If you do use the car for personal reasons, however, you can still claim 50%. You can find more information about the tax benefits of leasing online.
Corporation Tax Benefits
With a leased car in the U.K., you’re also able to write off some of the costs before you calculate your corporation’s tax liabilities. You can write off 100% of both the deposit and the monthly cost as long as the car that you lease has emissions of under 130g/km. If emissions are higher than that, you can still claim up to 85% of the cost of leasing back. Leasing a car can really help you keep those tax bills down.
