Unless you operate a totally online business, the need for a vehicle is a given. Even then, there are meetings with potential clients, office supplies to purchase and perhaps commuting back and forth to the office, unless of course it is home-based. Nonetheless, whether you have a small business or a huge company with multiple locations and a huge sales staff, there are benefits to leasing a car for business.
Reduction in Upfront Payments
One of the biggest concerns for most businesses is operating within a budget. When new cars are needed, there is generally a huge down payment required if there is to be a loan. Of course if the car is to be purchased with cash, that outlay of money can be huge. Leasing a vehicle for your company mitigates this initial layout of much needed operating capital.
Increase in Cash Flow
It only stands to reason that if operating expenses are reduced cash flow will increase proportionately. No business can operate efficiently without enough money for day-to-day affairs and paying bills timely.
Fewer Worries Over Maintenance
There is nothing worse than being grounded because your company vehicles are in the shop for repairs. Most, if not all, leasing companies have “loaners” available for your use when your leased car in in the shop for repairs. It’s nice to be able to leave the worries to someone else for a change!
Novated Leases Offer Incentivised Bonus Packages for Staff
Rather than leasing a vehicle for use at work, an employee can take advantage of what is called a novated lease. The employer pays the lease payments but the deductions are taken from his/her pre-salary, post-salary or a combination thereof. This constitutes a nice tax deduction when it comes time for reporting and can be made part of a complete benefits package which is alluring to a great number of job applicants.
Perhaps most appealing of all the benefits of leasing a car for business is in the fact that you can get a new vehicle every two to three years. Additionally, both you and your staff will have access to all the latest features with each new car leased. From upgraded safety to state-of-the-art fuel efficiency, leasing a new car every few years keeps you up-to-date and much safer in the long term.
Tax time is almost upon us again, if you’d like to discuss your tax obligation or how you can maximise your income with benefits such as a car, then call Odile from AVB on 1300 123 181.
Copyright AVB 2017. All Rights Reserved. This article may not be used without the prior written consent from the author. See below for more details…
DO YOU WANT TO USE THIS ARTICLE IN YOUR E-ZINE OR WEB SITE? You can, as long as you include this text copy in its entirety: Brisbane Small Business Accountants, Financial Planner, Loan Broker & Trainer Odile Mignot from AVB publishes the popular “My Business Success Newsletter” a monthly ezine with over 2500+ including solo-preneurs, entrepreneurs and business owners.