Acquiring a vehicle, whether for business or personal uses, is a major decision that requires careful planning as it affects your cash flow and balance sheet. These are the questions you need to ask when considering whether to lease, buy or rent vehicles for your business:
How are your financial resources?
Leasing is a good option for those with limited budgets. This means that you pay incrementally over a fixed period of time and that payment is based on a portion of the overall vehicles worth and this can offer a few advantages.
• Lower monthly payment
• Newer model vehicles
• Lower maintenance costs as new vehicles typically require less maintenance
The downside is that you are committed to a term and there is a lot of scrutiny put on dents, dings and scratches as they reduce the residual value of the vehicle which is important when the lease term is up.
Do you hate worrying about repairs and maintenance?
Another thing that makes leasing vehicles attractive is that you don’t have to worry about major repairs or maintenance. Some people find that leasing helps them focus more on managing their core business rather than having to worry about maintaining a fleet of vehicles. Just make sure that your lease contract comes with a manufacturer’s warranty that covers the entire length of the rental period. Be aware that you may be charged for excessive wear and tear. Make sure that you understand the leasing company’s standards and check if their policies are reasonable. At Thomas Solutions, we have forgiving wear and tear policies since we understand that most of our clients use our vehicles in rugged work sites or rough conditions.
Do you like the latest bells and whistles?
Leasing allows you to have the newest car models with all the latest technologies. Leasing gives you the opportunity to choose from a wide array of tech innovations. For example, to take the stress out of driving, some vehicles offer advanced driver assist systems such as adaptive cruise control. Some have lane departure warning systems that use cameras to alert you if the car has drifted outside your lane. Automatic Emergency Braking, on the other hand, utilizes sensors to assess if a forward collision crash is imminent to help you avoid accidents.
Can you take advantage of tax benefits?
If you’re looking to utilize the vehicle for work or your business, you can deduct your vehicle expenses from your total tax obligations. However, you must spread it out equally over the whole lease period. This can be a big savings boon compared to buying a car and paying taxes in full. Moreover, leasing vehicles give you a form of “off-balance sheet financing” which could be helpful should you plan to get other loans.
Will you fully utilize the vehicle?
If your business operations are predictable and you are able to determine more or less the number of miles you will be traveling, then leasing could be a good option. Remember that leasing a car often involves a limit on the miles traveled and if you exceed it, be prepared to pay an excess mileage fee penalty. Leasing provides the kind of flexibility that is vital for many small and medium companies looking to streamline their expenses particularly when it comes to transportation costs.
Do you need customized work trucks? Contact us at 1-877-479-1388 or email Steve Gruber at firstname.lastname@example.org for your car, truck or fleet rental and no-term leasing needs. We have locations in Hamilton, Selkirk & Niagara and service all of Ontario through our partner network. With a fleet of over 1000 vehicles and growing, Thomas Solutions has a wide array of work vehicles for lease or rent, and an expert team that provides fleet vehicle management services for large industrial firms.