Companies may require vehicles of their own to operate and carry out their work, although this depends on their type of business and their products/services they offer. To provide the employees with suitable company cars for business or personal use, several financial options are available to them.
Contract hire or leasing
Vehicle leasing is a strong choice for businesses at the moment thanks to the many benefits offered. The most apparent advantage is that they cost-effective compared to buying a car in the short-term. This frees up more capital, allowing companies to have more resources ready for use. Thanks to its flexibility, they can change their vehicles after every few years if they wish.
Lease payments are paid through monthly payments, with the contract period lasting 12 to 60 months, although the client can renew them anytime. The operational and maintenance costs are shouldered by the leasing company, including taxes, repairs and insurances. This service usually comes with a mileage limit, discouraging the overt use of their vehicles through extra fines. On some locations, companies can enjoy additional financial benefits by providing this incentive.
For its disadvantages, leasing is slightly expensive in the long run compared to buying, and you do not own the vehicle itself after the contract is over.
This is the perfect choice if they need a short-term solution for the company’s needs, and rewarding their employees with their own vehicle in the process. The advantages heavily outweigh the disadvantages, so businesses should definitely keep this one of their top options.
Purchasing or owning a vehicle
Buying a vehicle is another alternative for companies in need of a vehicle. This is one of the only options if they want full ownership over the vehicle. In the end, purchasing is a lot better than leasing, especially if they plan to use the vehicle for a period of five years or more. Owners can do what they wish with the vehicle after the payments are over.
Of course, vehicle ownership also has its own disadvantages. The costs are quite expensive as you’ll be paying for the vehicle and other costs associated with ownership. You’ll have to pay all the other remaining fees yourself, like taxes, insurances and such. Ownership implies responsibility, and the company is responsible for maintaining their vehicles. If they no longer have need of the vehicle, getting rid of it is equally difficult, as they need to sell it of or dispose of it through other means.
Purchasing is still an attractive option even if it doesn’t seem to have any apparent advantages. Some people place huge important on ownership, which might be necessary for companies in some instances.
- 4 Reasons Why Leasing a Car is a Good Idea (vehiclehireuk.wordpress.com)