Whether to purchase or lease a work car will significantly shift your company’s budget and operations. In this guide, we’ll explore business car leasing so that you can identify the best option for your business.
How does leasing a company car work?
Business cars on lease are typically rented for two to four years. You’ll pay an agreed monthly amount. It works like this:
- Leasing is cheaper in many respects because it often does not require any initial payments but just minimal ones.
- The monthly rent paid by the lessee covers the taxes as well as the interest accrued and the loss due to obsolescence to be realized on the vehicle. The amount of money involved in paying back interest on a loan is always more expensive compared to what one pays for it.
- The annual mileage limit in leases should not be surpassed. These extra charges will be incurred if beyond those limits.
- Maintenance: Most leasing contracts incorporate maintenance and service, which cut expenses on ownership.
- End of lease options: At this point, when the lease expires, you have an option of returning the car and paying nothing for it, buying it at residual cost, or seeking out another lease deal for a different vehicle.
When is a company car lease beneficial vs purchasing?
Both purchasing and renting have perks and downsides. Your specific needs determine the best solution for your business.
Why renting is beneficial
- Leasing can offer cheaper monthly payments compared to taking out a loan to purchase a car. Leasing can save you money in the short term.
- Warranties reduce rental vehicle repair and maintenance costs.
- Some flexible leases include upgrades to new models with additional features.
- Minimal depreciation risk: The leasing company sets the car’s post-lease value.
Best aspects of buying:
- Ownership: This may acquire an automobile that increases your business’s value.
- No annual mileage limits: As opposed to a lease, you can drive your car as much as you want.
- There are no fees or limitations for lease termination.
- Gain equity: Your company increases in value when you own more automobiles.
- Customization: You can suit the car to the unique needs of your business.
What are the best car lease companies in Canada?
The finest Canadian automobile leasing firms provide a large selection, affordable long-term hiring packages, and excellent customer service. Top firms include these:
- AUTO ONE Group has several luxury BMW, Mercedes-Benz, and Lexus automobiles — plus excellent customer service, affordable rates, and flexible lending choices.
- Canada Drives is a famous automobile rental company with a variety of makes, accurate market pricing, open terms, and simple agreements.
- Leasecosts.ca compares vehicle mortgages from various companies. This way, you can easily compare the most flexible rentals and affordable costs across a wide selection of automobiles.
- PractiCar’s lease rates, financing conditions, and selection of cars from all manufacturers are reasonable.
- Driving Force rents and leases automobiles with adjustable leases and affordable costs.
Conclusion: Business cars — lease or buy?
Besides corporate car leasing and buying, there are even more possibilities. This guide will help you make a wise business decision — for an even wider scope, contact us for a free consultation. We’ll listen to your circumstances and then give actionable advice.
