Paul Tobin explains why leasing vehicles is perfect for SMEs.
Having been in the finance and vehicle industry for several decades, I’m often asked to explain how leasing works and why it is an attractive proposition?
Simply put, leasing is a finance tool that allows the cost of the vehicle to be paid for by the business as a 100% tax-deductible expense in the same way your office space is leased.
Most businesses are attracted to leasing because it alleviates pressure on their cash flow, they don’t have to stump up for a deposit and the asset is not on the books.
This type of funding is perfect for SMEs who can then use their capital to fund business growth instead of tying it up in depreciating assets.
What About Costs?
Keeping a tight reign on costs is always important for business owners. Leasing is attractive because the costs are a lower (than HP) fixed monthly payment allowing the business to budget effectively.
When a business needs vehicles to operate as in the case of sales, services or trades it is paramount that vehicles stay on the road and have no down-time. Having new or very late model vehicles on the road is always going to be more reliable than older cars which usually cost more to run and require more maintenance the older they get.
The other attractive factor is the discounted price of the vehicle. As a tier 1 lease company we enjoy the highest discounts available in the industry. These are the type of discounts only available to insiders, we’re not allowed to shout about them and you won’t see this level of price reduction advertised on TV or online.
Depending on the make and model, we often find that applying our discount on a new vehicle actually makes it more affordable than buy a late model one. Crazy but true!
This means that SMEs can be driving new vehicles with the latest features at an affordable price which allows them to project a quality company image for less up-front cost.
As lease specialists it’s our job to make sure our clients get a great deal which is why we usually quote across multiple vehicles and multiple lease / finance structures which provides a range of options to compare.
Contact me if you’d like to talk through how leasing company vehicles could work for your business. Call 0800 275 374 or email paul@driveline.co.nz
Leave a Reply