Leasing vs Buying a Car for Business
When a business needs a vehicle, they have two options: to lease or buy. Each business will have different wants and needs specific to them. This will inform whether buying or leasing is more cost effective, convenient and an overall better deal for them.
Benefits of Leasing a Car for Business
There are many benefits of leasing a car for business, especially for businesses at the beginning of their journey. For a low initial outlay, followed by monthly payments for the period of the lease, a business can acquire a brand-new vehicle. Businesses can often get back some or all the VAT if they mainly use the vehicle for business.
The Lease Rental Restriction lets you claim 100 percent of the financed lease against taxable profits. This applies if the rented vehicle is low emission. This makes electric cars very appealing for those who want to lease.
Business leasing also provides more flexibility, with vehicles changing more often allowing for businesses to adapt to their needs more proactively.
Leasing a vehicle means the business does not own it. This also means the business does not own an asset. However, this reduces the risk of the asset losing value over time or getting damaged. They are also less exposed to costs associated with that asset, such as maintenance, servicing, MOTs and the like.
Benefits of Buying a Car for Business
Despite these advantages, purchasing a vehicle can be advantageous for some businesses with specific needs. For example, businesses with more cash may find it helpful to buy a vehicle. They might also want to modify a vehicle to meet their needs better.
Also, buying the vehicle outright may be a better financial choice. This is especially true if you plan to sell it later.
Leasing a vehicle comes with servicing costs and mileage limits. Businesses that use a vehicle often may prefer to own one. This way, they are not restricted by these limits.
If leasing a car for business seems good for you, contact Apertus Group. You can call 01604 212 828 or email info@apertusgroup.co.uk to learn more about our automotive procurement services.
