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How you can reduce company expenses by vehicle leasing

How you can reduce company expenses by vehicle leasing

Many companies have successfully reduced their expenses with the help of vehicle leasing. This means that they do not buy new cars for the use of the company, the employees and clients, instead they lease the vehicles for a specific duration. The organizations sign a deal with the vehicle leasing company and at the end of the duration of the deal the vehicle is simply returned to the leasing company. The duration of the lease depends of the specific requirements of the company taking the vehicle on lease. The best part is that with leasing deals, the client can change the older vehicle for a newer model at a much lower cost and with much less hassle.

Benefit of vehicle leasing

Nowadays companies prefer to lease not only cars, but also vans and trucks that they require for transporting goods. This is because leasing a vehicle is much cheaper than actually buying one. A vehicle that any company buys will be shown on its balance sheets as an asset. At the same time, the depreciation in the value of the vehicle has to be calculated and shown in the balance sheets every year. On the other hand, leasing a vehicle is simply an expense and does not have the same impact on the balance sheets. Another reason why leasing a vehicle is better because with usage and time a vehicle will require higher maintenance costs, but with a lease you can simply return the old vehicle and get a newer one. If a company buys a vehicle, they will have to worry about disposing off the vehicle once they have outgrown it, but with a lease you simply have to hand in the vehicle to the leasing company. This can save the company staff a lot of time, money and resources which can be directed towards more profitable projects. These are the main reasons why Vehicle Leasing has become so popular among businesses both big and small.

Things to keep in mind

Often the leasing companies provide the insurance and road tax on the vehicle. IF they don’t then you will have to look after these matters. Hence make sure whether these factors are included in the deal agreement. The charge on the vehicle is usually based on the intended mileage and the mode of usage. IF the annual mileage is exceeded there will be an additional charge. Some companies will also charge extra if the vehicle is in not too good a condition when it is returned. However, these extra charges come out to be much cheaper than maintenance and repairs of an old vehicle. Also ascertain whether the maintenance of the vehicle during the lease is taken care of by the lease company. Many lease companies provide this service at a nominal cost.

There are a lot of vehicle makes and models to choose from with any vehicle lease company. However, if you have a particular make and model in mind, then you may have to look around and do some comparative shopping.