But the challenging economic climate is forcing many businesses, big and small, to rethink the way in which they finance their transportation needs.
Cost-cutting is what the accountants and finance departments want, but this must be carried out without any impact on the businesses ability to continue to operate profitably. Lots or businesses are rethinking the provision of company cars. Instead of providing their executives and sales people with their own dedicated company car, bought from the local dealer, many are turning to business car leasing arrangements. Car pools are becoming common place as businesses cut back on the provision of company cars.
It is estimated that as much as 20 to 60% can be saved by leasing rather than purchasing vehicles for business.
Leasing rather than buying is the approach taken to vehicle finance taken by many businesses that make use of commercial vehicles and vans. Leasing vans and trucks is not new to business but was previously primarily used by larger organizations. Many business are resorting to automobile leasing as a way to cut their regular transportation costs during the current recession.
Businesses can take advantage of the many advantages that leasing can provide. The initial outlay is minimal, there are some useful tax advantages and the fixed, regular monthly payments can help with budgets.
One of the main disadvantages is that the business never actually owns the vehicles which remain the property of the vehicle leasing company. Another potential disadvantage is that you must generally estimate the anticipated mileage and if this is exceeded significant costs can result.
If you are in a business that needs to cut costs you would do well to look into the potential benefits of vehicle leasing.
