Business Car Leasing Explained
Buying vehicles for business purposes inevitably means handing over a large lump sum and is accepted by most businesses as a necessary expenditure, but this doesn’t have to be the case.
The option of leasing a business vehicle is becoming increasingly popular in the UK, allowing companies to offer business vehicles to their employees, but with a smaller capital outlay, and as a result, a much healthier cash flow.
So what is the process of business car leasing, how does it work, and will it benefit you?
What is business car leasing?
A business car lease allows employees the use of a vehicle for business purposes in exchange for a pre-agreed cost per month. This is a common way for businesses to use new vehicles without having to fully invest in owning the vehicle outright and seeing its value depreciate dramatically in a short period of time.
With most business vehicle lease agreements, you will need to put down an initial payment to secure the agreement. This usually amounts to a total of three monthly payments, but can vary depending on the terms of your agreement.
What are the benefits of business car leasing?
Cost-effective: When it comes to vehicle leasing, you’ll benefit from not having to pay out a large lump sum for a brand new vehicle. Instead, a small initial payment will be made, which will then be followed up with monthly payments. When compared to repayments on a car loan, this can be significantly lower, helping to improve cash flow.
New contract, new car: With the right leasing agreement, you’ll benefit from the opportunity to get a new vehicle at the end of your contract. That means better fuel economy, and better quality performance from newer models.
Support services taken care of: If you want to remove the stress of vehicle servicing and maintenance requirements, choose a contract hire agreement. With this type of vehicle lease agreement, you’ll have the opportunity to ask for vehicle maintenance services as part of your contract. This helps you stay on top of vehicle servicing requirements, and takes away the hassle of having to manage repairs, leaving you with more time to concentrate on the core aspects of your business.
Duty of care: Does your business require that employees visit partners and clients on a regular basis? With a business car lease, you don’t have to worry about employees using their own vehicles for business purposes. This ensures that the vehicles used will be newer, fit for purpose and well maintained.
Flexibility: When figuring out which business car lease agreement is right for you, you should have the flexibility to discuss the terms of the agreement. When it comes to mileage, discuss your requirements and how that will affect monthly repayments. If you temporarily need to expand your fleet, look into a short-term agreement, known as a minilease, that fits with your needs. Whatever your requirements, with the right provider, you should be offered a flexible agreement that meets your objectives.
Risk free: By opting to lease a car rather than own it, you avoid the depreciation risk and don’t need to worry about fluctuating used car values. You simply return the car at the end of the contract and can replace it with a brand new one.
Essentially, business car leasing offers you the benefits of owning a new vehicle, without any of the hassle that comes along with it. It’s an efficient way of ensuring you have access to new models without the risk of paying outright for assets that will inevitably depreciate in value. Elevate the status of your fleet, and subsequently your brand, by opting in to a business car lease contract that works for you.
Need further information on how vehicle leasing could work for your business? Get in touch with Maxxia – our team of experts can help you identify the best business car leasing deals for your business.