A lot of businesses have grown used to providing their transport needs by purchasing cars and vans from local dealers. Locally based garages are generally favoured as they are idally located to provide servicing and maintenance when required. Most businesses will be able to negotiate significant discounts due to the volume of vehicles they require and the ongoing maintenance and servicing.

But the current economic gloom is making many businesses rethink the way in which they finance their transport needs.

Accountants and finance departments want to cut costs but, obviously, this must be achieved without any impact on the profitability of the business. Lots or businesses are rethinking the provision of company cars. Instead of providing their executives and sales people with their own dedicated company car, bought from the local dealer, many are turning to company car leasing arrangements. Some are choosing to use a car pool of leased automobiles that can be used by any member of staff who needs a vehicle.

It is estimated that as much as 20 to 60% can be saved by leasing rather than purchasing vehicles for business.

Leasing rather than buying is the approach taken to vehicle finance taken by many businesses that make use of commercial vehicles and vans. Leasing vans and trucks is not new to business but was previously primarily used by larger organizations. Today’s challenging economic downturn has resulted in many small and medium sized enterprise choosing to lease their vans, refrigerated trucks and minibuses rather than buy.

Businesses can take advantage of the many advantages that leasing can provide. There are tax advantages for most businesses and the fixed monthly payments help accountants to budget their transport costs.

One of the main disadvantages is that the business never actually owns the vehicles which remain the property of the car leasing company. Another potential disadvantage is that you must generally estimate the anticipated mileage and if this is exceeded significant costs can result.

If you are a business, of any size, you would do well to research how much you could potentially save and the advantages that vehicle leasing could bring to your business.


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