| On paper it is hard to justify car leasing as the | | | | saving he would have made by buying a car |
| cheapest way to purchase (or have access to) a | | | | rather than leasing. In most cases the answer |
| new car. By the time you add up the costs | | | | would be yes. |
| involved and compare it to buying a car for cash, | | | | Having money either to invest in the business or |
| you can see that the total value will exceed the | | | | just be there for extra cash flow can have a far |
| value of the car. So why would anyone consider | | | | greater value that the extra payments on the car |
| car lease at all? | | | | that has been bought rather than leased. |
| The main reason is that you do not need to take | | | | But there are more reasons to consider when |
| you capital earned and put it all into a car that will | | | | leasing a car. If for instance something goes |
| inevitably depreciate in value. For many it could be | | | | wrong with your vehicle, because you do not own |
| they want a particular type of car, but do not | | | | it you have a legal right, for the lease company to |
| have the cash to buy. So leasing is the only | | | | get it fixed or replace it as well as the car |
| option, but for many wise business owners who | | | | manufacturer. In fact it is estimated you have |
| do have the cash, there are other reasons. | | | | 70% more rights as a consumer lease a car than |
| One business reason is cash flow. During this | | | | if you actually owned it. Then if you consider the |
| recession, it is often the business with the best | | | | cost of lease payments against a loan payment, |
| cash flow that survives and those that have a | | | | you can also see arguments that need considering. |
| poor one that will falter. Even businesses that on | | | | A loan payment is based on the value of the car |
| paper are profitable are going to the wall because | | | | bought, but a car lease payment is based on the |
| clients are not paying their bills on time. So by | | | | difference between the buying price and that |
| keeping as much money in the business at all | | | | value when it is handed back after the lease |
| times can help a business get through the rough | | | | period. That means it is possible for lower priced |
| times. When a business needs new vehicles, | | | | cars to cost more to lease than higher priced |
| choosing to keep the capital in the business and | | | | cars, if the depreciation value is lower. Certain |
| lease the cars and vans instead can keep the | | | | popular German cars have very low depreciation |
| business and its employees moving, but help its | | | | and can cost less to lease than other European |
| survival too. | | | | cars that may cost less to buy, but depreciate |
| The option of car lease can also help in good | | | | more over the lease term. |
| times also; take an entrepreneur for instance. | | | | Although not for everyone, car lease should be |
| Supposing this business man chose to lease his | | | | considered from a business perspective, to |
| car and use that money to invest in a new | | | | establish the real cost of motoring against the real |
| business venture, is it possible he could make | | | | cost of taking money out of your enterprise. |
| more money from that investment, than the | | | | |