Leasing has many advantages one of the main ones being that you can replace your vehicle with a new one every 2-4 years depending on the contract you sign up too.
One of the main reasons companies lease is that they do not hold any equity in the car, they return the vehicle after 2-4 years and all they have paid is a monthly finance cost over the contract period. There are little or no benefits to holding equity in your car as cars depreciate quickly and so the sell on price is greatly reduced.
When you lease a vehicle or vehicles, your payment is made up of the cost of the vehicle at the start of the lease, less the value of the vehicle at the end of your contract. Mileage allowances will play a big part here as a vehicle that returns after 3 years with 100,000 Kilometres will be worth significantly more than a vehicle return after the same period with 250,000 Kilometres on the meter. The average mileage of company vehicles in Ireland is 60,000 Kilometres per annum.
From a corporate point of view, the main advantages to leasing are:
- Lower Monthly Payments
- No Down Payment
- More Cars More Often
- Fewer Maintenance Headaches
There is also VAT relief available for companies that lease their vehicles. Since the Finance Act of 2008, the Revenue provides that any accountable persons (i.e. the company) can deduct up to 20% of the VAT incurred in the respect of purchasing and hiring vehicles. Terms & Conditions apply.
For companies who buy new cars every 2 to 3 years leasing will allow them to lower their payments or to drive a more expensive car with a monthly payment similar to a less-expensive car.
If you are interested in leasing for your company, please contact Jensen Fleet Solutions on 01 4605250 or email us at email@example.com