{"id":8804,"date":"2019-08-20T16:56:22","date_gmt":"2019-08-20T13:56:22","guid":{"rendered":"https:\/\/www.become.co\/blog\/?p=8804"},"modified":"2019-09-18T11:51:53","modified_gmt":"2019-09-18T08:51:53","slug":"how-to-lease-a-business-vehicle","status":"publish","type":"post","link":"https:\/\/www.become.co\/blog\/how-to-lease-a-business-vehicle\/","title":{"rendered":"Should You Lease or Buy Business Vehicles?"},"content":{"rendered":"\n

Wondering whether to lease or buy business vehicles? Then buckle-up and get ready for an information-packed road trip through the world of business car leasing and purchasing. We\u2019ll answer the top questions regarding car leasing and car buying for a business, including:<\/span><\/p>\n

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What is business car leasing?<\/span><\/p>\n

How do business car leases work?<\/span><\/p>\n

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Here, you\u2019ll find everything you need in order to make the right choice regarding leasing vs buying a business vehicle.<\/span><\/p>\n

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What is business car leasing?<\/span><\/h2>\n

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Business car leasing is a form of financial agreement between a business and a finance company whereby the business owner is able to essentially rent a vehicle for an extended period of time (usually a number of years, but can be shorter). Whether your business absolutely needs a vehicle in order to operate, or if it will just make your everyday business management easier, car leasing for businesses can be the perfect solution to your business\u2019s financial needs.<\/span><\/p>\n

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Important:<\/b> If you own a trucking business, it\u2019s worth noting that there are <\/span>trucking loans<\/span><\/a> that you may qualify for, which can be structured differently from business vehicle loans.<\/span><\/p>\n

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Of course, the type of business will affect the kind of industry loans<\/a> a business needs, as well as the specific circumstances that business finds itself in.<\/p>\n<\/blockquote>\n

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How do business car leases work?<\/span><\/h2>\n

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There are several points regarding car leasing for businesses that should be considered before putting the pedal to the metal. To begin with, business car leasing requires that the lessee be able to prove that the vehicle is used for business-related travel at least 50% of the time. Additionally, while monthly payments tend to be lower for leases, there are fees for exceeding the limit on how many miles you\u2019ll be permitted to travel per year with a leased vehicle.<\/span><\/p>\n

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When the lease term is complete, the lessee may either purchase the car or return it. That flexibility is one of the main points that make leasing such an attractive prospect for small business owners. But on the flip-side, by leasing a vehicle you won\u2019t be entitled to some of the tax deductions that you would be if you purchase it instead. That doesn’t seem to be stopping people from purchasing vehicles at the end of their lease – the 2019 Midyear Report by Edmunds found that lease penetration is at record levels of more than 32%<\/a>. In plain language, one-in-three lessees is buying the car when their lease term is complete – that’s big!<\/span><\/p>\n

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Note:<\/b> Be sure to learn the differences between business vehicle loans and <\/span>business equipment financing<\/span><\/a>. Although they\u2019re similar in some ways, in certain instances you\u2019ll find that one or the other may be preferable.<\/span><\/p>\n<\/blockquote>\n

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Lease vs buy a business vehicle: Pros & Cons<\/span><\/h2>\n

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Leasing<\/b><\/p>\n<\/td>\n

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Buying<\/b><\/p>\n<\/td>\n<\/tr>\n

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Pros<\/b><\/p>\n<\/td>\n

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Cons<\/b><\/p>\n<\/td>\n

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Pros<\/b><\/p>\n<\/td>\n

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Cons<\/b><\/p>\n<\/td>\n<\/tr>\n

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  • Typically no down-payment<\/span><\/li>\n<\/ul>\n
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    • Optimal for short-term needs<\/span><\/li>\n<\/ul>\n
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      • Upgrade vehicle after lease is up<\/span><\/li>\n<\/ul>\n<\/td>\n
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  • Mileage limits included in contract<\/span><\/li>\n<\/ul>\n
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    • Restrictions on who may drive vehicle<\/span><\/li>\n<\/ul>\n
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      • Mandatory maintenance costs<\/span><\/li>\n<\/ul>\n<\/td>\n
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  • No imposed mileage limits<\/span><\/li>\n<\/ul>\n
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    • Eligibility for vehicle depreciation tax deductions<\/span><\/li>\n<\/ul>\n
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      • Gain a valuable asset<\/span><\/li>\n<\/ul>\n<\/td>\n
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