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If your business requires you to be always out and on the road then leasing a car for your business has to be a winning idea. There are no upfront costs, there are no more servicing problems, no repair costs, there are no charges for MOT's to arrange - it's a brand new car (normally with just delivery mileage) and potentially it will cost you less than a bank loan on a used car. In addition at the end of the lease you'll be able to swap it for new one.
So if that's the case why don't more people do it? Well there are some drawbacks, and basic rules. You have to be VAT registered before you can lease a vehicle from a leasing company, plus you don't own the car. You're effectively hiring the car rather than buying so at the end of the lease, you will have to hand the car back - you'll find that some companies refer to it as contract hire rather than leasing. However for most businesses these drawbacks are actually plus points - the lack of hard earned capital lying around in the shape of a hunk of rusting metal with unpredictable running costs would be considered a godsend rather than a liability. Being able to budget on a fixed cost basis for your company transport is very appealing for even the largest businesses.
There are a few drawbacks with leasing a car. A lease is not as flexible as outright purchase, when you decide to lease you have to agree an average yearly mileage, if you go over the average mileage then you will incur a cost when you take the car back at the end of the lease. You will also be expected to keep the car in good order. Letting the dog run around it with it's mucky paws and letting the dog gnaw the car seats or allowing your kids to use the car as a play-pen will probably mean you'll be expected to pay towards the additional depreciation in the cars value. Lastly if you want to put your company name and address on the side of the contract car then think again unless you want to incur some additional costs for a re-spray at the end of your contract.
Lastly don’t forget that you will be driving this car around for the next one two three years so it is advisable for you to get a car you like. Just because it is a company car does not mean you should spend any less time reading up on it and going for test drives.
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