Until relatively recently, companies have been laboured with the high costs and depreciating value that comes with buying a company car. But in the past few years, an exciting alternative has stepped into the headlights.
Nowadays, car leasing is commonplace and continues to grow in popularity both with businesses and private drivers. So, why have things changed so drastically, so quickly? Here are a few good reasons:
Leasing has in the past been compared to renting a house. However, whilst on the one hand renting a home means ploughing money into an asset that increases in value that will one day line somebody else’s pocket, leasing a car means paying less in the short-term for an asset that over time will only decrease in value anyway.
Buying a car is financially nonsensical. Traditionally, companies have had to accept that their investment in employee’s vehicles will never be recovered. That’s not exactly great for business, but opting instead for monthly lease payments, costs come in at around 35%-55% less than repayments on a car loan and require only a small deposit rather than the full cost of buying a car outright.
Missing the maintenance costs
One car brings with it enough maintenance costs on its own, but a fleet of company vehicles can really get out of hand. Choosing to lease instead of buy a car means that the manufacturer’s warranty will typically cover the full period of the lease. This means that in the unlikely event that any issues should occur with a new vehicle, they will be taken care of without cost.
Saving on outlay
It’s important for any business to have enough capital set aside for unforeseen expenses, and laying out for a new car can be a risky decision especially for smaller businesses. Buying requires serious financial expenditure, putting businesses in a potentially risky situation. Leasing only requires a deposit and smaller recurring payments, which is particularly helpful for companies with limited capital available for huge upfront costs.
Getting the latest and the best
One of the most enjoyable benefits of leasing is being able to provide employees with the newest vehicles on the market. As leases are usually arranged for a relatively short, fixed period, it is possible to upgrade regularly.
This in itself provides further benefits. Fuel economy is always improving in new vehicles, and keeping up with the latest cars often means keeping running costs as low as possible. Safety is also an essential consideration for employers supplying their staff with company cars, and as features and safety ratings improve with almost every upgrade a manufacturer makes, companies can be sure they are as safe a possible when driving a brand new fleet. Additionally, technology continues to advance, meaning drivers are able to keep up with the latest in in-car tech when driving a leased vehicle. All of this will of course make for a happier workforce, which in turn is better for business.
To put this into perspective, you can lease an executive car from a premium car manufacturer e.g. A VW Scirocco starts from just £175 + vat per month (with www.vantage-leasing.com ).