How to Finance Your Next Company Car

Choosing the right vehicle for your company is a big decision. Depending on your business, it could be crucial to how you operate. Making the wrong decision means you could be stuck with something that isn’t up-to-task for an extended period of time. This is why leasing a vehicle makes much more sense than buying.
The Benefits of Buying
Many people prefer the idea of buying a vehicle because it gives them something tangible to hold on to. After all, you can always sell it and get some of your money back. This is true, but it doesn’t factor in the negatives that are associated with ownership. The average car depreciates in value by around 15% each year, and this only begins to slow down when it heads into its fifth year. In fact, a new car depreciates around 20% the moment it’s driven off the lot. Once you’re finally ready to sell or, in some case, once you’ve paid the off the last of the monthly instalments, you might begin to wonder if it was worth it.
The Benefits of Leasing
If you decide to lease a vehicle, on the other hand, you won’t have to think about these problems anymore. Not only would your monthly payments for the same vehicle be less, once your contract is up—usually after two-to-four years—you can start eyeing up something new.
What you pay each month will be primarily determined by your annual mileage. Leasing is becoming increasingly popular in the UK, and many providers such as LeaseVan offer a range of vehicle types to suit different needs. It’s also possible to include maintenance packages along with your fixed monthly fees so you no longer need to worry about any mechanical problems that could surface.
If you decide you want to end your contract early, you can do so by paying an early termination fee. While this won’t be cheap, it does give you the flexibility to switch to another vehicle. This may be better in the long-run if the vehicle you switch to requires a much lower monthly fee, or it could be because you just love what a certain manufacturer has brought off the production line.
In fluctuating markets, being flexible is key to long-term business success. Choosing a short-term lease agreement gives you this advantage over committing to buy, and you never have to worry about compromising on quality because of the short-term nature or get-out clause.