subject: Business Vehicle Leasing Compared To Private Ownership [print this page] Leasing your business vehicle can make a big difference to you businesses brand image as well as its bank balance. Here are some key differences between business vehicle leasing and private ownership.
Ownership and Maintenance
One of the most important differences between business vehicle leasing and private ownership is that when leasing a vehicle the leasing company owns the vehicle. This means that you are not responsible for any maintenance or most of the other risks involved with owning a vehicle privately. You are however responsible for sticking to the vehicle lease contract which may vary by leasing company. Of course some people just like the idea of owning their own car or feel paranoid about damaging a car that they do not own. All leased vehicles should be insured properly by the leasing company.
Financial benefits
Another significant benefit of leasing a vehicle over private hire is that the initial financial outlay can be much lower, especially if you choose to spread payments over the duration of the lease. What's more, from a business financing point of view, the outstanding leasing fee is considered 'off the books' which means that it does not count as debt against your company. However another consideration to take is that, like any loan, the longer you spread your payments over the lease time, the more interest you will pay.
Brand Image
Your companies brand image can be extremely important whether you are managing a fleet of salespeople who are required to travel or a fleet of trades people such as plumbers or electricians. Business vehicle leasing allows you to introduce new vehicles to your fleet relatively regularly. This means that your vehicles will be new and you can avoid issues related to deterioration and minimise breakdowns and downtime. This can give you a competitive edge when presenting your workforce to your client base.
Employee Satisfaction
As well as helping you present your brand in a professional light the promise of a new car at regular intervals can also help improve employee satisfaction. Vehicle leasing is a great way to affordably reward your workforce with new, desirable cars regularly at an affordable cost. This is a benefit as a satisfied employee is often much more motivated and efficient. What's more Employee retention can help your business save on the cost associated with human resources and replacing people.
Summary
To summarise, private car ownership can in some cases be preferred on a personal level. The idea of owning a vehicle can be attractive and in some cases, if you do not research your leasing company well, you may end up with complications but business vehicle leasing can provide a number of benefits including a smaller initial outlay and more affordable options when leasing desirable vehicles. You can replace vehicles more regularly improving your brand image and avoiding maintenance issues and you can incentivise your workforce and retain employees more effectively.
