An Overview To Business Car Leasing

Owing a car is not a big deal these days as there are various options available such as car lease

, car finance and car loans. You can decide your preference and go for the right option for you. Various car leasing options are available and one such option is business car leasing. It is actually a kind of car finance which is very much similar to renting a car. Here the vehicle does not belong to you but you can use it as it is yours just by paying for its use. When car leasing option is opted by a business then the latter is referred as the lessee and company that finances the vehicle is termed as leaser. The car insurance comprises the name of both the lessee and the leaser. Additionally, the vehicle title also mentions the name of the leaser; this is the reason that the lessee is not required to pay taxes on the buying price of the vehicle but pays only for the monthly lease payments. It can be understood in this way that the user is paying tax not for the vehicle but for time period during which it is used. Contrary to car lease, if you choose for car fianc or car loans then you own the vehicle and pay its entire purchase price in installments over a period of time and here you pay tax on the vehicles purchase price.

There are objectives behind businesses choosing car lease option as in this way they are able to buy an expensive car by paying a lower monthly payment as they need to pay only for the duration during which the vehicle is used and later on it is returned back. Another objective behind business car lease is to save from tax. By choosing this method they are able to show car lease payment as an expense and thus it gets tax deductible. The same fact holds true for other vehicle related expenditures like insurance and maintenance etc.

The business is left with some options after the car lease tem is over, the lessee has choice to either return or buy the car. In case of return of the vehicle, the dealer then sell the vehicle and most of the time earn good profit. But if the lessee chooses to buy the car then in this case, the remaining value of the vehicle is predetermined at the time of car lease. The amount can vary from one dealer to other but most of the time the value is about 50 to 60% of the total vehicle price.

There is a limitation to car lease or car loans and it is that the lessee does not have authority to sell the vehicle to someone else. For this, first they will be needed to buy the vehicle from the leaser and then only the vehicle can be sold. But the lessee can seek services of the sites which allow the lessees to avoid the need of buying a lease or wait till the end of the lease term is completed. So, car lease can be considered as one of the best options over car fianc or car loans especially for businesses.

by: Bill.

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