Newsroom

Should You Lease a Car for Your Business?

  • Oxcel Finance
  • May 18, 2022

Leasing a car for your business has become more common in recent years, however, prior to purchasing a business vehicle, it???s well worth weighing up your options. There are a number of considerations that you need to make, which might make financing a business vehicle more appealing.

Here are some of the pros and cons when looking at a car lease for an SME.

Pros

Upgrade your vehicle

One of the suitable parts of leasing a vehicle is that you can continue to upgrade your vehicle when the lease expires.

Business leases for vehicles are normally between 2???4 years which means that you can keep the vehicle updated when the time comes to renew the lease. That also means you will potentially be able to keep the car under the manufacturer???s warranty. Some leases might even include repair and maintenance costs.

Upfront Cost

When you lease a car, you are normally just agreeing to a fixed payment each month for the duration of the lease.

That means you won???t be required to come up with a large upfront payment, which you would typically have to if you purchased a car normally. This can mean additional capital you can spend on other areas of your business.

The added advantage of this is you won???t have your money tied up in a depreciating asset.

Fleet Discounts

Because lease providers operate large fleets of vehicles, there is the possibility to get discounts on vehicles and improved prices. This might mean a better deal on a superior model of car for your business.

Cons

Total Cost

A lease might be great for managing cash flow and reducing initial costs, however, you may find that you end up paying more than the value of the car over the life of the lease.

It???s important that you assess the total cost of all lease payments, including indirect costs, and compare that to what you would have to pay to finance a vehicle.

If you???re taking out a secured car loan, it might be possible to purchase the car without any money down. This is also worth comparing directly to the cost of leasing a car.

You Don???t Own the Car

If you???re running a business, there might be benefits to owning a car even if it is depreciating in value, when you take into account tax considerations.

If you don???t own the car, you might not be able to make any alterations to the vehicle which could be required for your business.

Locked-in

If you sign a lease and for some reason, you don???t need to use the car anymore, you might be locked into the repayments for the life of the lease.

It???s important to have a clear understanding of what you???ll need the vehicle for and how that fits into your business plan.

Related Posts

Car Loan

How You Can Pay Off a Car Loan in Time?

Whether you want to avoid paying any penalty for your car loan payments, stop paying more interest on the initial loan, or just want to get away from debt in general, paying off...

January 5, 2024
Car Loan

Tips for Improving Your Chances of Getting Approved for a Car Loan

Taking the proper steps and having the correct information can make all the difference in getting the loan you need to purchase that car of your dreams. 1. Get In Touch With...

January 11, 2024
Car Loan

The Art of Negotiation: Tips for Getting the Best Car Loan Deal

Securing the best car loan deal requires more than just finding a lender and accepting the terms offered. The art of negotiation plays a crucial role in ensuring you not only get...

January 14, 2024

Meet Our Panel

With a wide range of panel of lenders you can be assured we’ll find a competitive finance solution to suit your needs

  • All Lenders
  • Residential
  • Commercial
  • Business Loans
  • Asset Finance
  • Personal Loans
  • Industry Partners
icon

Looking For More Information?

We’ve made it convenient for you to find everything you need here

icon

Calculators & Tools

Try It

Helpful Articles

Read More

Finance Options

Read More

FAQs

Read More

Instant Quote

Get Quote

About Us

Read More