What Is A Business Lease Car?
Leasing a business car could make real financial sense in many cases. Leasing cars could be the best option for your business whether it is a company car meant for your employee or a fleet of cars that your company would be requiring for conducting smooth business. A corporate car is a vehicle that your company would essentially be renting for a specified number of years and would be returning it to the dealership after specified term comes to an end. You would have to follow the lease terms during that break, but you would be getting a relatively new vehicle and some extra perks.
Time Frame
Leasing would be a great idea for those businesses that would not be holding on to their cars for a very long time. You would be having a company lease car only for about two or maximum three years as opposed to the company owned car that your business gets to keep forever or indefinitely and could be disposed of as and when it wishes to.
During the shorter lease time frame, you would be required to make relatively lower car payments than what you would be paying had you bought the car. However, you would stop all payments for a company owned car after a while but you would have to carry on making payments for your leased business car. It is understood that after a period of 5 years, the actual financial advantages of leasing seem to be diminishing. Contact www.leasequit.com for effective and reasonable car leasing solutions.
Taxes
With any corporate lease car, you are entitled to an assortment of tax advantages for your business. You could consider deducting mileage either with actual expenses of miles driven or with the standard rate of the IRS. The deduction extent should be coinciding with the percentage of use; the business lease car is actually used for the company. Deductions of corporate car leasing are applicable to repair, car maintenance, car insurance premiums, and lease payments. In many cases, you would not be deducting insurance as it has already been taken into account, for instance, standard rate mileage.
Repairs, Maintenance and Insurance
Businesses that buy a car obviously, own them and need to pay for repairs and overall maintenance but those businesses that lease cars do not require to pay for repairs and maintenance. These are very much covered under the lease contract. However, insurance would tend to be really high as you would be using the car during its prime value years. In case of damage to your leased corporate vehicle or theft of your leased business car, you would actually be reimbursed the car’s market value and that would not be including the lease payments still imposed on the car.
Ownership and Use
Business car leasing seems to be the best solution for your small business till you are given mileage limits that could be anywhere from 10,000 to 15,000 per annum. Extra miles over the agreed limit would be coming with additional costs. However, the best thing about a leased car is that you do not need to sell off the vehicle at the end of your car lease. Only remember not to give up the leased car too early as you would be incurring early termination charges and fees.
Conclusion
Using a leased car for your business is almost the same as taking a personally leased car. The business car lease usually is accompanied with the paraphernalia of rules and regulations. The leasing firm would need to understand that you would be allowing your employees to drive the car. The leasing company would be offering you much better rates once you are able to develop your business and as you go about increasing the number of business cars you lease.