Recession Survival Tips for Businesses
Many businesses follow a traditional path, buying their vans and cars from local automobile dealers. Being local means that they are ideally located to support servicing and maintenance. Most businesses will be able to negotiate significant discounts due to the volume of vehicles they require and the ongoing maintenance and servicing.
But the challenging economic climate is forcing many businesses, big and small, to rethink the way in which they finance their transportation needs.
Business accountants want to cut transportation costs, but this must be achieved without risking profitability. Company cars is one area that many businesses are cutting back. 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.
The leasing approach has been taken by many companies who rely on their 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. There are some potentially significant tax advantages, the initial outlay is minimal and cash flow is helped by the fixed, known monthly payments.
One of the main disadvantages is that the business never actually owns the vehicles which remain the property of the car 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 a business, of any size, you would do well to research how much you could potentially save and the advantages that vehicle leasing could bring to your business.
