Leasing a car is often the best, safest, and smartest choice for growing businesses and individuals needing a new car.
With a lease in place, these companies can satisfy the demands of their consumers while driving a high-quality vehicle that matches their high standards.
Leasing a car for your company may be accomplished without the upfront financial outlay and long-term complexities associated with purchasing one outright.
How Does Car Leasing Work?
You probably already know how to buy a vehicle using various car loan options or through car financing. However, leasing is quite different from buying.
You are essentially “renting” a vehicle for some time, often between two and four years. Once the lease period is over, you can either renew or extend the lease, buy the car at its residual value (the expected value of a fixed asset after its lease term or usable life expires), or trade it in for a newer model.
Car dealers or a reputable leasing company request a monthly lease payment, which your company pays, or your pocket, depending on the lease agreement.
Keep in mind that you must qualify for car leasing. Included among the criteria for qualifying are your credit score, income, and job history.
What Are Three Car Leasing Options
A novated lease could be a useful way for employees who get paid to get a new car. It lets the financing be paid for with the money an employee earns before taxes. This maximises spending power because the money that would have gone to taxes is used to pay the lease instead. This lowers the employee’s taxable income.
A novated lease is a simple deal between an employee, employer, and a third-party lender. It’s easy to set up, doesn’t put a lot of administrative work on the employer, and can be combined with an “entirely serviced” alternative to save money on operational costs.
Operating leases are set up like financing leases, but the lessee doesn’t have to pay the residual value. The car is then returned to the lender at the end of the lease, and this means the borrower doesn’t have to decide whether to pay off the remaining balance or refinance it.
A finance lease is a common way to pay for a business vehicle. The lender bought the car, and then the borrower “rents” it every month. Most of the time, this means making a monthly lease payment and a final payment at the end of the lease period.
At the acquisition date, the borrower typically picks the automobile from a local dealer and negotiates the price; the subsequent finance arrangement is arranged with the borrower as the buyer.
How Easy Is It To Lease A Car?
Pretty easy, to be exact! Now that you know the many lease options available, visit trustworthy leasing companies or comparison websites such as Lease Loco that collaborate with Compare The Market, making it very simple to acquire a quick quote on any offers you see.
It is vital to know the lease terms and the first payment amount. Not all leasing firms need an advance deposit. Use the filter option on Lease Loco’s website to get the best offer and payment profile. You will discover several deals on their website in which the initial upfront cost is equivalent to the monthly leasing fee.
The Benefits of Leasing A Car
Among the benefits of leasing a car are:
- Those who do not have to pay the entire cost of the vehicle upfront will likely be able to purchase a premium car.
- Not having to provide a down payment for an auto loan.
- You have the option to upgrade your car after your lease term.
- Your monthly payments are less than your typical auto loan instalments.
- Paying no GST on the purchase price of the car.
- Using the purchasing power of leasing businesses that purchase vehicles in bulk for lower costs than an individual consumer might get.
- There is no commitment to purchase the vehicle after the lease period. You have the option of leasing a new car or walking away.
- Not having to account for extra operating and maintenance expenses. Typically, they are included in your monthly payments.
- You will pay less tax if you get into a novated lease.
Since purchasing a vehicle is one of the most expensive expenditures you can make, it is prudent to consider all of your alternatives.
Leasing has plenty of benefits, and with a lease, you get a new car every few years and do not have to deal with the headache of selling the car afterwards; you return the keys to the dealer and get a new lease.