Business Tips
Is Leasing A Car Best For Your Small Business?
Leasing a car is often the perfect solution to driving a reliable vehicle. However, many small business owners find themselves questioning whether it is better to lease a car personally or through their limited company. While both options provide a list of benefits, the only real method of determining the most suitable solution is basically to establish your individual financial situation.
As car leasing is an increasingly popular option for drivers to select the car of their dreams or simply afford the option of driving a brand new low fuel consumption vehicle, small businesses are also taking advantage of the appealing solution to lease a new car rather than settle for purchasing an unreliable vehicle simply because the price tag is appropriate.
Personal Leasing
If you are looking to lease a car personally you will definitely reap the rewarding benefit of being able to drive a new car regularly without having to pay large upfront costs and you won’t have to pay company vehicle tax on the car either. In addition to this, your relative road tax is usually also included in your monthly costs along with maintenance costs. While these alluring benefits are undeniably great, you may find the charming benefits of leasing a car through your company even more alluring. Regardless of the relevant tax benefits associated with leasing through your small business, you will need to determine the specifics of your small businesses financial situation as there are many situations where it is a much wiser decision to lease with a personal contract.
Business Leasing
When considering the advantages correlated with leasing a vehicle through your small enterprise, the attractively low deals set aside for business owners is usually a pleasing aspect. Furthermore, you will also be able to take advantage of lower tax fees as company cars usually provide business owners with lower tax costs as leasing a car through your business will also allow you to claim tax back in most cases. However, these benefits should only be considered after you have established whether or not your company will benefit financially from leasing a car.
Determining The Most Suitable Option
Leasing a new vehicle through your small business may be the best method to save on vehicle tax, although, it is best to consider how the additional monthly cost may essentially impact your cash flow. Depending on the size and general consistency of your small business, the solution of leasing a vehicle can be great for your pocket as you won’t have to worry about the car’s value depreciating, although, it is essential to consider all the specifics involved in each option as you would rather want to avoid paying any more tax than you actually have to. Small business owners are generally faced with hard to make decisions regarding their finances, such as choosing between a business loan and a business credit card and the specifics of how to lease a vehicle is no exception.
Dinesh Kumar VM
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