Cars are costly, and their value depreciates over time. These are two unavoidable realities of car ownership. A new car loses value when you drive it; however, several techniques minimise depreciation, including limiting your mileage and maintaining the vehicle in excellent condition.
However, if you want to minimise the depreciation risk effectively, you should consider alternatives.
Car leasing is an efficient method of managing depreciation expenses. For businesses, car leasing offers may be an excellent option for companies wishing to save money or give incentives like company cars to their staff. Don't forget you can still get covers for cars you are leasing.
Each year, many individuals become aware of leasing, enabling them to drive a new car without incurring the associated costs. It's that simple, learn more about how a car lease can save you money.
Monthly Payments Are Affordable
You only pay the difference between the purchase price and the residual value while leasing. Unlike a Personal Contract Purchase (PCP), there is no interest, and, unlike with a purchase, you are not responsible for the total amount.
This implies that you could buy a more pricey vehicle on the same monthly budget. When you compare leasing to loan repayments on an identical car, the monthly payments you would pay are really cut in half.
Small Deposit Fee
Many PCP packages and similar loan arrangements need a 10%-20% down payment, which makes the first payment especially difficult on your budget. You may drive away in a brand-new car with a lease after making only one monthly rental payment.
This makes leasing ideal for a variety of situations. For instance, a lesser deposit is advantageous if you've just started a new job and have a consistent income but lack the funds to get a new car.
You Avoid Incurring Additional Fees
Upgrading your car regularly is not simply a means to amaze your friends and neighbours, and you get to avoid the expenses connected with driving an older vehicle.
While newer cars tend to have fewer problems with leasing, any faults or issues you experience are often covered by the warranty.
Additionally, the leasing company will cover regular maintenance, repairs, and even premium tyres if you lease a vehicle with maintenance options.
Fixed Pricing
Purchasing a new car is likely to be one of the most significant purchases you'll make in your lifetime, so the ability to make reasonable, set payments is one of the main perks of leasing a car.
All payments are agreed upon in advance with a lease, and there are no exceptions to the yearly mileage or equity requirements. Other types of financing, such as PCP, offer the promise of equity after your contract.
Monthly fees will remain constant during the term of your contract. This should significantly streamline budgeting since you'll be able to control your outgoing expenses within your budget from the start.
Insurance Cover Is Included
Every vehicle needs insurance, and leasing is no exception. Like other add-ons such as maintenance plans and breakdown coverage, insurance is an extra monthly rental expense.
However, certain leasing companies may provide a combined agreement that includes insurance, which, although not always much cheaper, does mean you will only have one monthly payment for your car.
Because the leased car is always the leasing company's property, acquiring excellent insurance is essentially more than simply peace of mind. Most leasing companies have mandated insurance requirements, and you must get coverage before receiving your car.
Businesses Can Reclaim VAT On Vehicle Leasing Payments
One of the best benefits of a company leasing a vehicle is the opportunity to claim VAT on both the first and monthly payments. This is only achievable if your businesses are VAT registered.
Not every company can afford to purchase a new vehicle or fleet, and SMEs, in particular, may struggle to get funding for a new car. However, if you are a company owner, you may take advantage of various tax benefits associated with automobile leasing, ranging from mileage refunds to low-emission savings.
You may collect up to 100% of the VAT on your contract when you lease a company. Additionally, businesses can claim VAT on maintenance expenses and any extra mileage accrued during the leasing term.
To Conclude
If your current car payments are straining your budget, it may be time to explore leasing a personal car or your company's fleet of vehicles. You no longer have to worry or settle for less when it comes to controlling your driving expenses with car leasing.
You can regain complete control over your monthly car spending since your lease agreement consolidates all of your expenditures into manageable monthly payments.
