Car Rental, Buying or even leasing a vehicle. The choice of how you get your hands on a vehicle are simply endless (well three at the very least). When it comes to making the right decision for your business, whether that be either Van Rental,Car Hire, Buying or Lease Buying.
Doug Caverly over at Small Business News Has written a frankly excellent article which I have re-printed below.
For the average individual, buying a vehicle is a smarter financial option than leasing one. Things seem to lean in the same direction for small businesses, but there are some different factors to consider.
Fortune’s Anne Fisher writes, “One benefit of leasing is that it usually takes a smaller cash outlay upfront, and you can then deduct monthly lease payments as rental expenses on your taxes. Buying requires a bigger initial payment and then depreciating the asset over its useful life, which may mean a smaller annual tax deduction. Since a car’s value drops fastest in its first few years, leasing is wiser if you don’t plan to keep the vehicle for long.”
Also, if you do plan to keep the vehicle for a while, think about how that will reflect on your business; you don’t want people to associate your company with some rusty, discontinued sedan.
But paying for something and then keeping it is usually a much smarter option than returning the item after a few years. Fisher points out that this route is especially likely to save money if you’re driving the vehicle a lot (since most leases have mileage limits).
As with most things, you’ll just have to weigh your business’s needs and finances, and find what’s right for you. Also, in this one instance, be sure to offer your humble author a test drive if you get anything interesting.
Personally I am of the opinion that when a person makes the step towards purchasing a vehicle, they should do so knowing full well, what each of their choices entails. For example, if you take a care out with a credit account with the firm, its worth remembering that unless you take out the ‘con’ of Payment Protection you could be horribly stung by the credit company if you miss payments or even lose your job. Car Rental has traditionally been looked at as a Holiday/Tourism based industry predominately for the more adventurous in Spain who use the omnipresent at airports. When it comes to outright buying, personally, this is the best choice, as you at the very least know exactly what you have paid for. It also means that when it comes to budgeting for the month: the only concerns should be regarding road tax and insurance.
What ever choice one makes regarding a new vehicle its definitely worth remembering that the choice could technically work out the wrong way. Planning is key and only spending the bare minimum doesn’t necessarily get you the best deal! Of course the same metrics can literally applied to business vehicles such as vans or even Van rental as opposed to buying