Car leasing – is it worth it?
Probably you’ve already heard the word leasing many times. Probably many of you wondered what it is exactly, others might already know the meaning and know what’s going on, maybe some of you even used this type of service. For most of us, it seems that leasing can be used by someone who has an enterprise or by large companies, but are you sure about it? What is this funding method, quite popular in recent years, and is it worth using it?
What is leasing?
Car leasing is a service that Combines rent and loan. You use a car leased under strict conditions specified in the leasing contract. During this period, the car doesn’t belong to you – you only rent it by paying the leasing installments. Of course, after the Lease agreement ends you can buy a car and the purchase amount will be lower than the market value of the car.
The main advantages of leasing
Most often, entrepreneurs simply profit from purchasing a car on a lease basis. Usually, after paying off all installments, such a car is not much more expensive than bought for cash straight from the dealer, and it is difficult to find a loan on such good terms. Another great advantage of this form of car purchase is also associated with loans. Leased car is a fixed asset under certain conditions and therefore doesn’t adversely affect the company’s creditworthiness.
This, in turn, allows you to take loans for other purposes, for example to develop your business. It is worth remembering that in this way you can get not only a car, but also a van or a truck.
There is also no problem with the purchase of a tractor, semi-trailer, bus or specialized vehicle on similar terms. Large companies usually also offer car leasing and servicing. This means a great saving of time, especially when the company has a large fleet of vehicles. Servicing dozens or even several hundred cars can be very time-consuming for an enterprise. By signing a contract for several years, you can also often avoid increases in AC or TPL insurance, which have been very common in recent years. For most entrepreneurs, buying a car in this way means, above all, considerable savings and very convenient tax optimization.
Buying out a car after leasing – is it worth it?
Prices that the lessee can count on after the end of the lease period give the opportunity to buy the car at a cost significantly lower than its market value. Therefore, not buying a car seems unreasonable. However, this is an individual entrepreneur’s issue.
They may buy out or resign from it and take another leased car that will be a newer and less worn out. An entrepreneur using a car that was the subject of a leasing contract and having the right to buy back, most often uses this option after the leasing period ends. This is supported by measurable tax benefits and the fact that most often the value of a given vehicle is significantly Below market value.
In addition, when purchasing a leased vehicle, the customer knows the history of car use, purchases a reliable and tested car with full Technical documentation.