Commercial vehicle leasing can be an advantageous pathway for many types of industries. Whether you are a start up with not alot of cash flow or a company that doesn’t need vehicles year round, commercial vehicle leasing could be the solution for your transportation and financial needs.
What exactly is commercial vehicle leasing? Basically with a commercial vehicle lease, you would be making monthly payments much like paying rent. Just like rent, these are usually long term leases such as three to five years. So the leasing company purchases the vehicle, and then allows your business to be the driver.
The beauty of commercial vehicle leasing is that there is a vehicle for lease out there for whatever transportation type your business demands. Maybe you have employees that have to be on the road constantly for sales and need good gas mileage cars, or you have a foreman that has to oversee projects in various locations with treacherous terrain and needs a heavy duty truck, or a seasonal event company that needs large vans to transport all of their supplies. These are just some examples of the variety of vehicles available for commercial leasing.
If you find that your business is in need of vehicles in order to run the business, how do you know whether or not commercial vehicle leasing is right for you? Let us a look at some factors as to how commercial vehicle leasing could be beneficial to your business.
- Increase cash flow: When purchasing a vehicle, it normally requires a substantial amount of money up front. For most companies, that is a hard pill to swallow. Especially, if you have to take out a loan. Those payments can be astronomical. However, when you rent, there is monthly payment that is worked out between you and the company that you are renting from. This payment is usually doable much like paying rent on a home versus paying the mortgage.
- Tax benefits: Unfortunately, the depreciation deduction is not available to businesses that choose to lease vehicles instead of purchasing them. Don’t despair, there is a bright side. If you do lease a commercial vehicle, your business will be allowed to take a tax deduction for the lease expense.
- Maintenance: Most can agree that one of the biggest stresses of owning a vehicle is maintenance. If maintenance is one of your trigger words, renting a commercial vehicle could possibly be your salvation. For the most part, renting can lower maintenance costs. Plus, it is possible that potential costs for maintenance can be included in your monthly payments. Despite how you work it out with your rental company, you would definitely spend more money and engage in more stress if you were dealing with a vehicle you own.
- End of Lease: When your vehicle rental lease is up, you get to wash your hands of that vehicle free and clear. This means that not once do you have to consider the resale value like you would if the vehicle was yours. Also, you are not obligated to purchase the vehicle after the lease has ended. Turn that used vehicle in and start dreaming of the new model that would much better fit your needs and desires.
- Upgrades: Seems like everytime you turn around, there is a new commercial boasting the new technology available for your vehicle. Much like our phones it is nearly impossible to stay current, especially if you have to continue purchasing new vehicles to keep up with the latest technology if that is what is most important to you. So if having access to the forever changing vehicle industry technology is what matters to you, then being able to upgrade without concern of devaluing due to it being a rental is certainly a benefit for you.
These are just a few benefits to consider when making that important decision as to whether or not leasing or purchasing a commercial vehicle is the proper move for your business. Determine your business goals and needs and then weigh the pros and cons to discover your beneficial transportation pathway.