Any growing business will eventually operate a fleet of one or more vehicles; these vehicles can be used for a wide range of purposes, such as being used as company cars by employees whom the firm wants to go out and visit customers and suppliers on a regular basis, by tradesmen that work on a customer’s site, and even for transporting raw materials and products to different company locations across the UK.
If a company is doing really well and making massive profits, it will probably just buy cars outright, but regardless of how much profit your business makes, it is more of a financially viable idea to lease any cars it may need. Here’s why:
Leasing frees up your cash flow
When a firm leases one or more cars, they only have to come up with a small upfront amount, as opposed to paying a large sum of money for vehicles when buying outright.
This means that you can use any spare cash within the business on other important investment and expansion plans, rather than dedicating most, if not all of the money towards fleet purchases.
Less paperwork and administration
Car leasing plans are very flexible, and with a plethora of lease providers available on today’s market, one has a vast choice of options and organisations that can tailor leasing agreements specifically to a company’s needs.
These flexible options include the duration of the lease agreement, the amount of money paid upfront and the monthly instalments that are to be made, and leasing agreements can even include some handy optional extras such as servicing plans and other routine motoring costs.
Leased cars can be managed easily
There are a number of tools at your disposal when it comes to fleet management:
- Fuel cards allow you to control spending on fuel purchases by your employees and help you to address any areas of concern;
- Maintenance plans mean that the cars in your fleet are always serviced and checked over in accordance with manufacturer’s recommended servicing intervals, and they also prove to the leasing company that you are taking care of their vehicles;
- Lease management systems, either online or software-based, enable you to take charge of your entire fleet of leased cars, so that you know exactly what your company is spending on each vehicle, as well as knowing the leasing terms for each vehicle, which is handy for finding out when your Ford Focus lease is about to expire, for example!
Tax benefits are available with leased cars
With contract hire leasing plans, VAT registered businesses can normally reclaim 50% VAT back for any money paid on each leasing agreement if the car is used for both business and personal use.
If the car is used purely for business (a taxi firm operating a fleet of leased vehicles is a good example of this), then you can reclaim 100% VAT back. Capital allowances can also be claimed, which can help to reduce the amount of tax that your company needs to pay on its profits.