Large companies are complex business entities that are difficult to manage effectively and if there are ways to simplify things, management usually focuses on that. If we take a look at a company that requires 50 company cars for the sales force to use, there are many advantages to leasing; all servicing is handled by the leasing company and when a replacement vehicle is needed, the switch happens.
Tax benefits
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If you talk to an experienced business accountant, they would inform you that there are specific tax advantages to leasing rather than owning. If you are interested in learning more about leasing, check with this novated lease calculator to find out the monthly payments on the vehicle of your choosing. Big businesses are always looking for ways to cut their running costs and vehicle leasing is definitely one way to reduce costs and save tax.
Vehicle maintenance
The car leasing company handles all servicing and maintenance, which frees the client from all liability; imagine the logistics involved with maintaining a 250-vehicle fleet! Larger companies do not want the extra liability that comes with vehicle ownership, which is why they prefer to deal with established vehicle leasing companies.
High mileage vehicles
A national company with a huge salesforce would involve high mileage use, with salespeople driving to their clients and when a specific mileage is reached, the lease company replaces the vehicle with no cost to the client company. If, on the other hand, the cars are company-owned, then they will depreciate greatly with high mileage, which the company wishes to avoid. Click here for information about technical logistics.
Lease contract negotiation
The client would negotiate the lease agreement as much as possible to give them a favorable deal; things like free oil changes and tyre replacement might come into play and at the end of the day, a detailed agreement is drafted, ready to be signed by both parties. Of course, the bigger the contract, the more bargaining power the client company has; leases are typically renewed on an annual basis, which gives the client the opportunity to look elsewhere, should they wish.
No capital investment
When a company leases a fleet of company cars or commercial vans, they do not have to make a downpayment, which is much preferred. Leasing companies have to be very competitive and they offer many incentives to woo clients; if you would like to learn more about the many benefits of vehicle leasing, start with a Google search to locate the website of a leading Australian car leasing company and see what packages they offer. It is possible to lease a personal car; take a look at novated leasing, which bundles all your motoring costs into a single monthly payment.
Car leasing is growing in popularity, as more people realise the benefits of leasing rather than buying. Companies prefer leasing for all of the reasons listed above.