Any small or medium business owner will spend a lot of their time devoted to working out how they can bring down the costs of operating, and indeed, there are many areas in which changes can be made. Today we’re going to look at motoring expenses, and more specifically, why leasing rather than buying or financing vehicles might make more sense.
The simple fact is that you’re far more likely to be renting your business premises than you are to be actually paying to own them, and the same principle makes sense for vehicles. If you’re running a fleet of even just a few cars or vans, the cost of the assets each month could well be quite significant, but the cost of leasing is very likely to be considerably less. Click here to see just how low contracts can be.
So why is this?
When you actually purchase a vehicle, you’re spreading out the entire cost over however long you have it for, but when leasing, you’re only actually paying for the use of it. This is to say that you don’t own the vehicle; you’re paying the company that provides the contract for things like the wear and tear and depreciation while you’ve got it. This means the cost to you is much less. You won’t have an asset at the end of the contract, but this does also mean that you don’t need to worry about selling cars or vans on when you need a newer model.
But what about drawbacks?
As already mentioned, the only real drawback to leasing is that you don’t actually own the vehicle, but for the most part this isn’t really very important at all, for two reasons. The first is that depreciation can be a real headache through ownership as you’re not sure how much your asset will be worth in a few years’ time. The other is that most people will trade in their old vehicle for a newer model once it’s been paid for, and you can do this virtually straight away once your contract is up.
The takeaway then, is that if you want to bring down your monthly costs, and you’d rather not think about the hassle of selling on a vehicle later, then leasing could be ideal, whether you just need one or two cars, or a whole fleet of vans.
