March 3rd, 2009 
Bell
Is Buying or Leasing Best for Company Vehicles?
Most company cars and vans, these days, are financed by either outright purchase or a leasing contract. Each has is positives and negatives.
Outright Purchase
The main advantage of outright purchase is ownership. When the car or van has been paid for it belongs to your company. This will enable your company to sell the vehicles in order to retrieve some of the money spent.
The key disadvantage of outright purchase for most companies is that you must pay the full cost of the vehicle, either as a one-off lump sum or spread over an agreed period. This can mean significant expense, particularly if your company runs a fleet of company vehicles. Finding enough funds to purchase vehicles outright can cause businesses some unwanted cash flow problems.
There are, of course, additional expenses that need to be paid including maintenance, insurance and breakdown cover.
Company Car and Van Leasing
The key advantages of company car leasing to business are the benefits it brings to cash flow. The initial down-payment on a new lease contract are generally very low and the monthly payments, spread over an agreed period of two or three years, are fixed and known in advance. This is what company accountants love about leasing. Knowing how much transports costs are from month to month makes budgeting and financial planning so much simpler.
Also, most reputable leasing companies will offer to include the cost of all maintenance in the leasing contract. They will even offer to include replacement tyres and windscreens in the lease contract.
Although car insurance is not normally included in the lease contract it is often offered by the leasing company as an optional extra which, if accepted, is generally cheaper than it would be if purchased separately.
One of the key disadvantages of leasing is that the car or van never actually belongs to your business. However many would see this as an advantages as your business doesn’t have to be concerned with the disposal of the vehicles when the lease expires or the vehicle reaches the end of its useful life.
A disadvantage for the driver is that the government considers a company car as benefit in kind which makes it taxable. A higher rate of taxation now applies to company cars since recent changes to the UK tax laws. There is, however, a tax adavantage for your company as you can claim for the vehicle as a capital cost and offset this against your company profits.
Clearly there are many factors to bear in mind when a company is considering either to lease vans and cars or to purchase them outright. There is also a great deal of competition in the car leasing industry so it is well worth shopping around for the best deal. Many vehicle leasing firms will give you free breakdown cover and offer flexible mileage plans to entice your business. So the best advice is to do your homework and not to grab the first car leasing deal that comes your way.
Legal Questions : How to Trademark a Business Name
|
|
The Company Men $9.43 In creating ER, writer-director John Wells launched the career of George Clooney, who starred in Up in the Air, which could serve as a prequel to The Company Men. When times get tough, Boston shipping conglomerate GTX sheds employees–while CEO James Salinger (Craig T. Nelson) retains his $22 million salary. HR director Sally Wilcox (Maria Bello), the companion of married cofounder Gene McClary (T… |
|
|
Criminal Instinct: The Wandering Soul Murders $2.99 … |
|
|
Criminal Instinct: The Wandering Soul Murders $4.99 … |
|
|
TurboTax Home & Business Federal + e-File + State 2010 – [Old Version] $8.15 Designed for sole proprietors, self-employed, consultants, 1099 contractors, and single-owner LLCs. Expanded interview walks you through entering business income and expenses to help you maximize business and personal deductions, home office deductions, depreciation and more. Create W-2 and 1099-MISC forms for your employees and contractors. The Intuit TurboTax Home & Business Tax Year 2010 Softwa… |
|
|
TurboTax Home & Business Federal + State + Federal efile 2009 $42.89 TURBOTAX HOME & BUSINESS WITH… |
Posted in 
Tags: 
