One of the most popular methods of buying cars nowadays is car hire and leasing, and many people are now switching towards leasing due to the inherent benefits it offer over car financing. When a person finances a car, he pays a monthly installment for an asset, which is depreciating, so the money invested does not gain any value. On the other hand, with leasing contracts, one pays the money for the period of using the car and then after that period the leasing company takes back the car. One of the most significant benefits of contract hire leasing is the less costly repayments, which is almost 35 to 55 percent lesser than repayment on car loans.
Leasing benefits for businesses
Another car ownership scheme, which is very popular, especially for businesses is Business Car Leasing. Financing business vehicles with this kind of scheme result into more saving and tax benefits at the same time. If a business is vat-registered and it uses the vehicle solely for business, then it can reclaim the entire vat on the car. This also helps in saving capital for small-scale business, which can be invested in other requirements of the business. Businesses can pay a fixed monthly installment with contract hireoption.
Budget-friendly leasing option
With contract hire leasing, payments are computed at the end of the agreement’s term and the expected depreciation is also taken into account. Therefore, this kind of leasing scheme is more favorable for businesses looking for a budget-friendly way of financing business vehicles. These schemes calls for low deposits and some companies offer maintenance, lowering the administration overhead as well. This means more savings for the business. However, businesses have to keep an eye on agreed mileage, as crossing the agreed limit can lead to penalties.
Calculation of lease price
Off late a huge number of car hire and leasing companies have emerged in the market, and they purchase thousands of vehicles straight from the manufacturers. Normally, the lease price is determined by calculating the difference amid purchase price of the vehicle and estimated residual value. Condition of the vehicle at the end of the contract and the mileage is also taken into account while computing the lease price. If a car does not lose more money and offers lower mileage, then the residual price will be higher and the cost of leasing will be lower. With the growing market of car leasing, now many businesses prefer Business Car Leasing method than other car leasing methods.
Benefits of business car hire and leasing over conventional