We hear it quite often that we should buy something if it appreciates and lease something if it depreciates. In any case, cars depreciate and it makes a perfect business sense to lease them. Business owners seeking to establish or renew their truck or car fleets should consider leasing them. Leasing could be a huge money saver from any business perspective. Be it for a business or personal use, our car starts to depreciate the moment we sign the purchasing document.
In other, we already lose money when the car is officially ours. Cars made by a number of producers depreciate slower due to their renowned reliability, but cars will always lose their value over time. Depreciation is an important factor to measure the profitability of a company, which makes leasing a rather interesting subject. Leasing should be a simple concept, although many business owners are sceptical about this. Many people mistakenly believe that car leasing is equal to renting.
The concept of leasing should be quite simple. It’s roughly similar to loan and we pay for the car at a specific duration of months, but the car won’t be ours. So, what’s the point in paying for cars that will never be ours? In general, there are a few factors that make car leasing better than typical ownership.
1. First of all, the month payments can be up to 60 percent lower than standard car loan and we won’t need to pay for a large upfront deposit.
2. Depending on leasing contract, we could be able renew our fleet every 4 years. In some cases, road taxes can be included with the lease prices. Warranty should cover much of the maintenance costs, especially if we consider that we could get new cars every a few years.
3. There are less maintenance costs associated with leasing, because we don’t own the car and it’s possible to get new ones after a few years. We don’t need to be worried that the car will break down and have major damage after prolonged use.
4. There’s no need to sell leased cars as used cars. With leasing, business can simply return the car to the leasing agency and request new ones. In fact, the process could just be a little more complicated than calling the leasing company to remind them that it’s the time to get replacement. No hassles and no time of work jumping from one dealer to another looking for best deals.As we can see, there are significant benefits associated with car leasing that makes it an acceptable solution from the business standpoint.
Before deciding to lease a car, we should determine its price and consider a number of factors. The car should be brand new if possible, so we can disregard condition and mileage. Two factors that may influence our monthly payments are depreciation and residual values. Residual value is the estimated value of the car at the end of the lease period. Each make and model may depreciate differently and it’s a good idea to choose cars that depreciate slower.
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