The leasing of business cars is a way for SMEs to use company cars that have low monthly payment and a predetermined mileage for an agreed period of time – usually between two, three, and four years.
It is a monthly payment for the lease on the vehicle and at the conclusion of the lease you hand it back and then start over.
If you’ve never even thought about it before here are six compelling reasons why you should think about business car leasing.
1. Fixed-cost motoring is a must for any business Avoid depreciation
If cash flow is tight and you have capital available in short supply it is not something you want to do is tie up your business in banks and loans for company vehicles.
Business car leasing removes having to come up with the initial capital required to finance company cars, as you pay only the set monthly fee – which means the expense is predictable and budgeted for.
After the term of the contract is up the car is then collected and sold relieving you of the stress of depreciation, and dealing with the sale.
2. Cash flow improvement
It is expensive to buy cars – with contract hire you can put the money into your business and increase cash flow
One of the most appealing aspects about leasing cars for business is that it’s an additional credit line, which means you can free up money to invest in your business and alleviate the stress of cash flow. As we said above, you can stop using your money on a depreciating asset when it can be used to help expand your business.
3. Access to new cars at discount on fleets
With numerous lease and contract hire companies vying for your business, it’s a buyers’ market.
Check around to get the best deals on the most recent models. Make use of the expertise of your small fleet leasing supplier to find the best rates for you.
These smaller fleet leasing firms are experts in this particular field – and might find you the perfect car for your budget that you had not previously thought about.
Some companies also offer an opportunity to price match So make sure you inquire before making any purchase.
4. Keep your employees in latest vehicles, and enjoy new safety features and improved fuel economy
Your staff and business will benefit from the reliability as well as the durability and incredible fuel efficiency when you drive the most recent models and makes. It will cut down on your expenses and personal expenses also – as well as reducing their exposure to corporate car tax. In the event of a catastrophe, should it occur, they’ll be protected by the most secure vehicles.
If you’re VAT registered, you’ll able to get 50% of the VAT back
5. VAT benefits half of the VAT is reclaimable
Business car leasing has VAT to pay. On your monthly invoices you’ll be eligible to claim 50% of VAT refund if you’re VAT registered, naturally!
It isn’t possible to get 100% of the VAT back because there’s a 99percent of the instances – private use of the car. If your lease car is used solely to conduct business, for instance when it’s a pool vehicle that is not used for private use – then you can claim 100 percent of VAT back.
Check out roadweb.uk when searching for a auto blog.
Whatever way you choose, it’s an tax efficient method of financing your company cars.
If you are a member of a maintenance contract in addition to the monthly car rental for business that you pay for, then 100% of the VAT that you pay for that can be claimed. There is no limit.
6. Corporation tax benefits – 100 100% reclaimable for cars under 130g/km.
Choose a car with CO2 emissions of less than 130g/km. This means you’ll be able to save corporate tax since the entire cost of leasing is and can be reclaimed against your company’s tax-deductible profits.
If you surpass the breakpoint, you will only claim the lease amount against your corporation tax. To make the most tax-efficient use of a company car lease, choose an engine that’s less than 130g/km.
A business car lease right for you?
The final decision on whether to go with a business car lease to you SME small fleet depends on multiple changeable factors such as the mileage, personal tax arrangements and the type of car.
As a whole Business car leasing is an effective outsourcing option which can help you save time and uses your finances cost-efficiently as a means of funding new company cars for you SME tiny fleet.
It’s worth taking a look at the internet-based UK car leasing companies to discover what you can get for your business.
If you’re still not sure you’re not sure, speak to a fleet leasing specialist as well as your financial adviser to find out what’s right for you.