5 Major Benefits of leasing a car - Autos - Cars

5 Major Benefits of leasing a car   by Alka

in Autos / Cars    (submitted 2012-04-12)

Buying a new vehicle means incurring a huge cost and thus paying many expenses for its maintenance and operation. If you are looking forward to buy a new vehicle, vehicle leasing is a considerable alternative with you. A good way to escape expenses of owning a vehicle and save money is lease a vehicle from a trusted and efficient fleet management company.

A Fleet Management Company is a company that covers the entire operation and administration of all the activities relating to the transportation, on the behalf of or for its clients/customers and it also includes activities for management of the location, tracking, destination point, resources, contents and even fuel charges.

What is vehicle leasing?

Fleet management companies lease motor vehicles for a fixed period of time to their customers as an alternative to vehicle purchase. It is a widely used by businesses as a highly cost-effective method of using vehicles for business, without the usually needed cash outlay.

The major benefits of leasing a vehicle are as follows:

No Down Payment

The costs of leasing a car are far lesser than buying a new one, as you do not have to shell out any downpayment for the car.

And the best part is that, you can lease a more luxurious and expensive car than you would otherwise buy. Moreover leasing a car is considered as an expense, not a depreciating asset, which makes more sense.

Escape from depreciation

One of the most common reasons for leasing cars is escape the cost of depreciation and repairs. After few years of usage the residual value that you can receive by selling your vehicle is merely 20% to 50% of its original cost, this implies to a huge capital loss for a business. This is due to wear and tear of machinery and depreciation. Whereas if you lease a vehicle you just have to pay a fixed monthly rent for it, which is an expense not a loss.

Save tax

Since you don't own the vehicle you aren't liable to pay tax on it. This law differs from a state to state. You have to pay tax only on your payment, not on the price of vehicle you use.

Lower or NO maintenance costs

Many people have to pay loads of money for repairs and maintenance of their old vehicles, these expenses represent a huge chunk in their balance sheet. By leasing a vehicle they can avoid the hassles of maintenance repairs and focus on their core activities. And other benefit is that you can ensure that vehicles will not break down and create problems in your business activities or for personal usage. Also, most leasing companies offer comprehensive insurance for their cars; all this is included in the fixed lease rentals which comes to be very economical for the clients.

Change your Car every 3-4 years

Car leasing is a great option for someone who likes to drive a new car every 3-4 years. At the end of the lease tenure just return the car back to the Leasing company and opt for a new fancy car which otherwise you wouldn't have due to resource constraints.

Leasing a car doesn't make you owner of the car, but do you really want to own something that continuously depreciates? Leasing a car is an easy way to get your dream vehicle without making a big hole in your pocket. But it should be noted that, in order to get the best benefits and hassle free driving you should lease car only from a well known and trusted fleet management company.