Auto leasing is more widespread these days with more consumers realising the advantages of leasing, but it was corporate car leasing that sparked consumer interest in personal deals.
How fleet leasing works
Companies can finance their vehicles for business use with a minimum downpayment – normally 3 months – and an agreed mileage for the agreement. Generally deals are calculated over a fixed period, from 6 months to 48 months and above. The mileage allowance is always agreed in advance, and can range from 10,000 miles to 40,000 miles per annum. The car is returned to the leasing company at the end of the contractual period.
For businesses, the key advantage of company car leasing is flexibility, amongst the many advantages, which we explore below.
Lower upfront costs
Buying a fleet of vehicles outright means that you are forced to pay a large sum of money upfront, as well as take on ownership of vehicles that may not hold their value for the long term. With leasing, the deposit required is much smaller in comparison, usually equal to 3 monthly repayments.
Fixed monthly repayments
Monthly repayments for a lease agreement are usually set at a fixed, more manageable amount. This makes it easier to manage your company budget.
Set period of availability
With a lease contract, companies have use of the car for a fixed duration. This is especially useful for companies with flexible workloads or a high staff turnover, as the vehicles are there when needed, and you are not left with unwanted cars after.
The most common method is business contract hire, which is subject to VAT. Companies that are VAT registered can reclaim 50% of the VAT, and in some cases where the vehicle is used solely for business, it may be possible to reclaim 100% of the VAT.
Access to better vehicles
There are lower payments with leasing, so vehicles that are usually too expensive become more affordable. Furthermore, leased vehicles are normally new – all vehicles in Yes Lease deals are brand new. With a better fleet of vehicles, businesses are able to project a stronger, more impressive image. Driving new cars also equates to better fuel economy, greater safety and performance advancements, plus vehicles with low carbon emissions have financial incentives.
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