When it comes to leasing a car for business, there are a few things you should know to make the best decision for your company. This comprehensive guide will cover the ins and outs of leasing a car for business, so you can be sure you’re getting the best deal possible:
What is a Business Lease?
A business lease is a contract between a business and a car leasing company in which the business agrees to pay a set monthly amount for the use of a car over a set period. The car remains the property of the leasing company during the lease period, and at the end of the lease, the business can either return the car or purchase it outright.
What are the Benefits of Leasing a Car for Business?
There are several benefits to leasing a car for business, including:
• Fixed monthly payments – When you lease a car for business, you’ll know exactly how much your monthly payments will be, making budgeting easier.
• Lower upfront costs – Since you’re not purchasing the car outright, you won’t need to come up with as much money upfront, which can be helpful if you’re tight on cash.
• Tax deductions – In most cases, you can deduct your monthly lease payments on your business taxes.
• Flexibility – At the end of your lease, you have the option to return the car or purchase it outright, giving you the flexibility to choose what’s best for your business.
What are the Drawbacks of Leasing a Car for Business?
There are a few drawbacks to leasing a car for business, including:
• Limited mileage – Most leases come with a mileage limit, so if you plan on putting a lot of miles on the car, you may end up paying extra at the end of the lease.
• Limited customization – Since you don’t own the car, you may not be able to make certain modifications or additions that you would otherwise be able to make.
• Early termination fees – If you need to end your lease early, you may be charged a fee.
How Do I Choose the Right Car to Lease for My Business?
When choosing a car to lease for your business, you will want to consider the following factors:
• Your business needs: What are you using the car for? Is it for sales reps, or for deliveries? Do you need a van or a car?
• The type of business: If you’re in a service business, you may not need to lease a luxury car.
• Your budget: You will want to factor in the monthly payments, as well as any fees associated with the lease.
• Your credit: Your credit score may affect the interest rate on your lease.
• Your business location: If you have a business in a rural area, you may not need to lease a car that gets great gas mileage.
• Your business growth: If you’re a startup, you may not need to lease a car that seats seven.
• Your employees: If you have employees who will be using the car, you will want to make sure that they are insured.
• Your business insurance: You will want to ensure that your business insurance covers the car.
• Your business taxes: You may be able to deduct the lease payments on your business taxes.
Leasing a car for business can be a great way to get the transportation you need without having to make a large upfront investment. However, there are a few things you should keep in mind before signing on the dotted line. Make sure you understand the terms of the lease, as well as the limitations on how you can use the vehicle. You’ll also want to factor in the cost of insurance and maintenance. If you do your homework and plan ahead, leasing a car for business can be a smart and cost-effective way to keep your business moving.
If you’re looking for the cheapest cars to lease in Canada, LeaseAxel has got you covered. Our used vehicle leasing option lets you lease a car, truck, SUV or luxury vehicle from any of Canada’s auto dealers. Get pre-approved today by reaching out to our team!