Vehicle leasing is the leasing (or the use of) a motor vehicle for a fixed period of time. It is commonly offered by dealers as an alternative to vehicle purchase but is widely used by businesses as a highly cost-effective method of acquiring (or having the use of) vehicles for business, without the usually needed cash outlay.
The key difference in a lease is that after the primary term (usually 2, 3 or 4 years) the vehicle has to be returned to the leasing company for disposal.
The Advantages to Leasing a Vehicle
Limited Liability: You only pay for the part of the vehicle that you actually use.
Free Up your Balance Sheet: The leased car does not get included in the company balance sheet as a depreciating asset as it is treated as an expense, thus it makes much more sense to lease a car as compared to Loans or outright purchase.
Tax Savings: You only pay tax on your payment, not the full purchase price of the car.
Business Write-Off: Most businesses can write off up to 80% of the lease payment where as on a purchase there are much lower percentages that can be written off and must be amortized over a 60 month period usually with the greatest allowed percentage being limited to the very first year of the purchase.
Less Maintenance Costs: Most lease terms span about the same time that the manufacturers warranty lasts so usually any major service or maintenance that is needed is usually covered under vehicle warranty, leaving you with less out-of-pocket expenses.
Built-in Gap Coverage: All leases call for a higher level of insurance coverage which automatically includes full payoff of the vehicle in the case of a total loss or theft.
Easier Credit Approval: Generally with a lower monthly payment combined with the fact that you are asking the finance company for a lower loan amount to be approved for on a lease, you may find that getting approved for a lease may be easier than a purchase where you would be asking for a loan on the entire purchase price of the vehicle.
Vehicle Discount Packages: Some manufacturer pack
age savings discounts that show up on the window sticker can be added to the initial value of the vehicle therefore will raise the ending residual value, which in turn lowers your monthly payment.
Car Maintenance is important – Here Are Some Tricks!!!
Air Filter
Changing the air filter on your car will take about ten minutes and will only cost you the price of a new filter, which runs usually runs around $15
Windshield Wipers
Replacing your windshield wipers is another simple maintenance task you can do on your own in about 10 minutes. It only costs about $15.
Headlights
Replacing your headlights is fairly simple and should only take you ten minutes. The only cost with this maintenance task is the cost of the new headlight, which can run anywhere from $20-$100 depending on what kind of bulb you need.
Brake Pads
Installing new brake pads can be a little more complicated and may take up to an hour to complete.
Radiator Flush
Be sure you give your engine time to cool before you take on this task, otherwise you may burn yourself.
Thus advantages of leasing and importance of car maintenance have been studied in detail.
The key difference in a lease is that after the primary term (usually 2, 3 or 4 years) the vehicle has to be returned to the leasing company for disposal.
The Advantages to Leasing a Vehicle
Limited Liability: You only pay for the part of the vehicle that you actually use.
Free Up your Balance Sheet: The leased car does not get included in the company balance sheet as a depreciating asset as it is treated as an expense, thus it makes much more sense to lease a car as compared to Loans or outright purchase.
Tax Savings: You only pay tax on your payment, not the full purchase price of the car.
Business Write-Off: Most businesses can write off up to 80% of the lease payment where as on a purchase there are much lower percentages that can be written off and must be amortized over a 60 month period usually with the greatest allowed percentage being limited to the very first year of the purchase.
Less Maintenance Costs: Most lease terms span about the same time that the manufacturers warranty lasts so usually any major service or maintenance that is needed is usually covered under vehicle warranty, leaving you with less out-of-pocket expenses.
Built-in Gap Coverage: All leases call for a higher level of insurance coverage which automatically includes full payoff of the vehicle in the case of a total loss or theft.
Easier Credit Approval: Generally with a lower monthly payment combined with the fact that you are asking the finance company for a lower loan amount to be approved for on a lease, you may find that getting approved for a lease may be easier than a purchase where you would be asking for a loan on the entire purchase price of the vehicle.
Vehicle Discount Packages: Some manufacturer pack
age savings discounts that show up on the window sticker can be added to the initial value of the vehicle therefore will raise the ending residual value, which in turn lowers your monthly payment.
Car Maintenance is important – Here Are Some Tricks!!!
Air Filter
Changing the air filter on your car will take about ten minutes and will only cost you the price of a new filter, which runs usually runs around $15
Windshield Wipers
Replacing your windshield wipers is another simple maintenance task you can do on your own in about 10 minutes. It only costs about $15.
Headlights
Replacing your headlights is fairly simple and should only take you ten minutes. The only cost with this maintenance task is the cost of the new headlight, which can run anywhere from $20-$100 depending on what kind of bulb you need.
Brake Pads
Installing new brake pads can be a little more complicated and may take up to an hour to complete.
Radiator Flush
Be sure you give your engine time to cool before you take on this task, otherwise you may burn yourself.
Thus advantages of leasing and importance of car maintenance have been studied in detail.
