Driveline Fleet - car leasing. All you've gotta do is drive!

  • Home
  • About
    • About Us
    • About Car Leasing
    • About Car Financing
    • About Ex-Lease Cars
    • About Novated Lease
    • Why use a car lease company?
  • Lease New
    • Utes
    • SUVs
    • Small Cars
    • Medium Cars
    • Large Cars
    • EVs & Hybrids
    • Prestige European Cars
    • Vans
    • People Movers
    • Special Enhanced Vehicles
    • Trucks
    • Plant & Equipment
  • Ex-Lease & Used
  • Services
    • Fleet Management
    • Car Accident Management
    • Fuel Card
  • Resources
    • Customer Reviews
    • Downloads
    • Blog
    • Driveline Tutorials
  • Contact
    • Find a Consultant
    • Auckland
    • Christchurch
    • Napier
    • Tauranga
    • Wellington
    • Whangarei
  • 0800 275-374
Menu
Home » Blog » 3 financial benefits of leasing a car

3 financial benefits of leasing a car

By Lianca van Oudtshoorn | 10 September 2018 | Posted in Buyer Tips & Tricks

Today, we’re going to look at 3 financial benefits businesses get from leasing a car.

Put simply, a car lease is a finance tool that allows a business to acquire vehicles. It is usually done with new cars over a 3-5 year period. Essentially, you are not paying for the full value of the car, just the difference between the purchase price and what the end value is set at. At the end of the lease period, you hand the car back in good condition.

Tax benefits for businesses

Leasing a car lets you claim up to 100% of the cost as a tax deductible operating expense. It makes life very easy for you and your accountant. You won’t have a depreciating asset on your balance sheet. The payments for use of the car are consistent and easy to budget for as the payments are fixed over the term.

Buying a vehicle outright involves a huge upfront capital investment and more often than not will involve a hire purchase contract to fund the purchase. You’re not only paying for the vehicle but also maintenance, insurance etc. With a hire purchase there is often an upfront deposit required. You claim the interest and depreciation cost and it sits on your balance sheet.

Vehicle leasing in most cases is a more effective way to offset costs against tax because it goes into your income statement as a simple operating expense.

How does it price up against Hire Purchase?

Here’s an example of a Ute with a RRP of $50,000: the 2018 Holden Colorado LTZ 2WD Crew Cab. Lease rate excludes optional accessories or add-ons.

At the current lease price (correct at the time of writing), you would make a monthly repayment of $600+GST P/Mth a month over a 48 month term.

Using our Car Finance Calculator, the hire purchase repayment on the Colorado would be $1,343.05 a month over a 4 year period with no deposit applied.

Why does leasing usually price up better? Because you are not paying the whole value of the vehicle off. Just the value between the cost price and sale value at the end of the lease term. Lease companies also have significant buying advantages over most businesses. Therefore, the upfront cost of the vehicle is lower to start with.

Most clients these days see the benefit of changing vehicles out every 3-4 years instead of the old way of simply running vehicles into the ground. The SmartLease fleet management system has hundreds of vehicles being tracked and monitored over many fleets, vehicle types and age ranges. It is very easy to demonstrate the simple economic advantages of implementing 3-4 year replacement programmes when you see some of the maintenance horror stories in some fleets.

Free up capital

Last year, a study by Carspring found that New Zealand has the highest vehicle depreciation rates in the world. Their research showed that a brand new car will lose 5.6% of its value for every 10,000kms travelled. Say the new vehicle cost you $30,000. Imagine what you could have done with that money?

Leasing a car allows you the freedom to use your capital for more productive areas of your business. This could be something like an awesome website redesign, taking an apprentice on or improving your customer service.

If you’d like to find out more about our Driveline SmartLease, give us a call today on 0800 275-374 for a free, no obligation chat…or fill in the quote request form below and we’ll touch base with you pronto.

Find out more about leasing with our Simple Guide to Vehicle Leasing

Search our vehicles

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Related articles

What’s the range of electric vehicles

How far does it go on a full charge? Range anxiety has been one of the key reasons why electric vehicles have not been … More »

how to buy a new car

How to buy a new car

Colin Bower, one of Driveline's Business Consultant's in the Bay of Plenty shares his top 6 tips for buying a new … More »

How to buy a new car – 7 tips from a motor industry veteran

Colin Bower, one of our vehicle finance specialists in the Bay of Plenty shares his top seven tips on everything you … More »

Latest posts

2021 Mazda BT-50 is set to impress with new lineup

The battle is on between the crossover SUV’s

WHICH SUV SUITS YOU?

Categories

  • Buyer Tips & Tricks
  • Case Studies
  • News
  • Reviews
  • Smart Deals
    • Citroen
    • Dodge
    • Fiat
    • Ford
    • Foton
    • Holden
    • Hyundai
    • Isuzu
    • Kia
    • LDV
    • Mazda
    • Mercedes Benz
    • Mini
    • Mitsubishi
    • Nissan
    • Peugeot
    • Renault
    • Skoda
    • Ssangyong
    • Suzuki
    • Toyota
    • Van & Ute Specials
    • Volkswagen
  • Uncategorized

Our Blog

  • 2021 Mazda BT-50 is set to impress with new lineup

    WITH roots extending back to the domestic launch of the Mazda B1500 B-series truck in August 1961, the BT-50 line... Read more »

  • The battle is on between the crossover SUV’s

    The Nissan Juke squares up to the Skoda Kamiq and SEAT Arona in the battle for the supermini-SUV crown. The... Read more »

  • WHICH SUV SUITS YOU?

    Whether it’s time to upgrade from a sedan or wagon, or as a socially acceptable move downscale from a full-size... Read more »

  • Which Van suits your needs?

    We have done the research for you on the differences on these Vans.Whether you need a Van to transport tools... Read more »

  • Need an SUV?

    We have a huge range of vehicles and our consultants will help you figure out what’s the best vehicle for... Read more »

  • 2021 Kia Sorento Review

    We had the opportunity to take a closer look and test drive the all-new Kia Sorento. Our first impression of... Read more »

Quick Info

  • Home
  • About Us
  • About Car Leasing
  • About Car Financing
  • About Ex-Lease Cars
  • About Novated Lease
  • Fleet Management
  • Fuel Card
  • Blog
  • Why use a car lease company?

Quick Search

  • SUVs
  • Utes
  • Small Cars
  • Medium Cars
  • Large Cars
  • EVs & Hybrids
  • Prestige European
  • Vans
  • People Movers
  • Short Term Lease
  • Trucks
  • Plant & Equipment
  • Ex-Lease & Used
0800 275-374
  • Click Get a quote
  • Find Find a consultant near you
  • Email info@driveline.co.nz
  • Facebook
  • Rss

Copyright © 2011-2021 Driveline Fleet Ltd. All Rights Reserved | admin | EVOLVE® marketing agency