These days many business owners prefer to lease a car or truck under their business instead of through personal credit. Leasing a car through your business offers several advantages, and you can look forward to driving a newer model car at lower monthly payments. If you want to know more about leasing a vehicle through your business and find a good deal, check out eAutoLease.com. You can look up a variety of cars and make the best decision based on your business needs and budget.
How to Lease a Car Through Your Business – 5 Steps You Should Follow
Read on to find out if leasing a car through your business will be a good idea and how you can find the right vehicle within your budget.
Work Out How You Will Be Using This Vehicle
If you are considering leasing a car through your business, you will have to research and work out how you will be using this vehicle. Not every business owner needs to lease a company car through their business. Sole proprietors and partnerships can also lease a car with a personal account and either write off qualified business costs or take a standard mileage rate and tax deductions by following IRS guidelines for claiming vehicle expenses.
However, if you have a complicated business structure, need a car for business purposes only, or want to own a fleet of business vehicles, you can separate out lease costs through a business lease as a business expense. Tax rules are different for businesses that have five or more vehicles, or if the vehicle is used for rental.
You should be clear about how long you expect to own a car. If you are thinking about long-term, lower taxes, licensing, and insurance, leasing is not the right choice. It works best for people who want a new car every few years to support business needs and image, don’t have lots of liquid cash for a large down payment, and are not so concerned about owning a vehicle.
- Check Out the Leasing Costs
Leasing may be an affordable way to get a newer model vehicle into your business fleet, but it does not have a simple payment structure. It has a variety of options with varying terms, prices, and penalties, as compared to buying a car which is a straightforward procedure.
Before leasing a car through your business, you must make an effort to learn about associated costs to ensure you do not face any issues later on.
There may be additional payments you will be required to make, such as a down payment, sales tax, title and licensing fee, and any other local or municipal taxes or fees for getting a new vehicle. Do not make a hasty decision. Shop around, and you will find a deal that works for you.
- Use Business Credit or a Personal Guarantee
If your business has optimized its business credit and has a great credit score, the vehicle can be leased in the business name. However, if your business is new and does not have a good credit profile, chances are it will not qualify for a favorable lease payment plan and you will have to personally guarantee the vehicle.
In such a case, even if your business is not doing well and cannot make payments, you will be personally responsible for them. For a newly established business, you will have to take responsibility. You will have to focus on the finances and work with experts to come up with the best option.
Read more: Selling A Leased Car
Buying or Leasing a Car Under a Business – Which Is Better?
Identifying the differences between buying and leasing a car under your business can help you better understand the options and how they can serve you and your business the right way.
- The main difference between buying and leasing for business is that while buying offers complete ownership of the vehicle, you will have to return the vehicle once the lease term ends.
- Also, when you buy a vehicle, you don’t have to worry about mileage limits or wanting to customize it, but as a lessee, you cannot make any changes or the car or go over the limit.
- Leasing offers lower monthly payments that work for business along with other perks, but you do not build any equity. You have to return the vehicle at the end unlike purchasing a vehicle when you become the owner after paying off the loan.
Is Leasing a Car the Right Option for You?
Leasing is a good option, but you must do your research, take time and compare pricing to know if it is the right option for you. You can look forward to driving a new car that gives you reliability, promotes your professional image, and offers some flexibility in your transport budget.
If you want to free up some cash, leasing offers numerous options to small business owners. Identifying your business needs accurately can help you make a better decision in this regard.
Visit eAutoLease.com to find out more about leasing a car for business needs and how it can be done right. With expert advice, you can find the best options and enjoy driving a car that enhances your business image in the best possible way without affecting your budget.
