Exploring Car Lease Options for Your Business: Tips and Strategies

Businesses are no less in need of cars than individual drivers. Landscapers, confectioners, building contractors, and food suppliers are just a few from the list of those who can’t work full-scale without trucks and minivans. If you are in the club, then you may be choosing between buying or leasing a vehicle or two to cover all the needs and goals of your business.

Both options have their own takeaways and drawbacks, so in general, it’s up to you and your budget what to prefer. In fact, purchasing a car is a rather straightforward process while lease may imply some complexities for newcomers. So, if you consider this option, let us learn more about how to lease a car through your business and what steps you can take to make a deal which serves your interest better.

What Are the Benefits of Leasing a Car for Your Lease?

Leasing has been on the rise for the last decade due to the unstable situation on the car market, and businesses more often consider it as a reasonable alternative to a vehicle purchase. So, here are the pros of the solution:

• Lower monthly payments: In fact, the bills you pay for every month with your leased car are usually more attractive than those for car loans.
• Attractive tax deductions: If you lease for business, the cost of repair and maintenance are cut from your tax, so you bear less expenses.
• Free lease transfer: You can do it with no strings attached while car owners have less freedom here.
• Favorable terms: You can lease a car for your business with zero down payment, save more than you could expect, and invest more into the development of your project.
• No hassle: You can return your leased car at the end of the contract and sign up for a new special or discontinue the partnership without thinking of the further sale of the vehicle.

What Do Your Lease Payments Consist Of?

Today, car leasing is known as an affordable way to procure a car for your smooth workflow. However, it may not be as simple if you want to figure out every detail. When you purchase a vehicle, there are only a couple of factors you have to consider. When you lease, you face an array of options, and each of them implies definite terms and prices, as well as penalties for violating the terms of the contract.

Here are the terms you may see when you delve deeper into your contract, as well as in studying the leasing process:

• Capitalized cost: In brief, it is the total price of your lease. As a rule, it is lower than the MSRP or a listed price of the car you want to take.
• Cap cost reductions: This term implies discounts which make the lease price even more affordable. The list of them may include trade-in programs and manufacturer’s incentives.
• Residual value: Experts use the term to identify the price of your leased car at the end of the contract. The estimate usually depends on the make and model, so consider it when you choose a car for lease. Vehicles with high residual value usually imply smaller monthly payments, but if you want to buy out the car after your lease is over, the specials with low residual value are preferred.

Besides, your costs may also include down payment, licensing, tax, or title expenses, and extra local or municipal withholdings.

What About Taxes if You Lease a Car for Business?

In fact, the entire cost of your lease may be lower if you are planning to use the leased car for business purposes only. However, if you also want to include it into your personal routine, only partial deductions are possible. So, track it carefully to avoid any penalties.

There are two methods to figure business use, and both of them are offered by the IRS. Here they are:

1. Actual expense method. Here, only a share of each lease payment related to business use of the vehicle is liable for deduction. You can’t do the same with the payments which are about personal use of your leased vehicle.
2. Standard mileage rate method. In this case, you just monitor expenses related to the use of your vehicle for the business needs. The lessees usually may deduct fuel, tires, registration fees, insurance, licenses, and depreciation according to the number of miles which are regarded as full-scale business miles.

Besides, if the lease period of a truck or a van exceeds 30 days, your lease payments may be also cut down through the so-called inclusion amount. If you want more details, just look through IRS Publication 463.

At last, it is not necessary to lease a vehicle through your business if you want to get some tax benefits from your deal. It is a normal practice when entrepreneurs make personal lease deals and then just write off their workflow cost using one of the two methods mentioned above.

Still, tax issues related to the car lease may cause some confusion if you are a newbie in this field. Still, feel free to contact your tax specialist to figure out all the details and possible pitfalls.

Business Car Lease — How It Works?

Normally, lessees sign up for a car through their business for a long period; in fact, lease terms imply the drive for at least three years. This is why the payments are lower, and the conditions of a contract are usually very lucrative. However, it doesn’t mean that these deals are absolutely easy: the agreements can be a bit complex and include some small-print fragments.

To avoid any mistakes in your future lease, you should be especially careful from the very beginning and choose a company to turn to very thoroughly. Different dealers which offer leases have different policies, so some research comes in handy here. Today, reliable companies do make some aspects of the deal quite negotiable. Usually, these aspects are mileage allowance and interest rates which depend on your credit score and maybe the sum of your down payment. Besides, it is very important to look through fragments written in small print to avoid some unspoken things or tricks like hidden fees.

Still, if you want a lucrative car lease deal for your business on the most transparent terms, Grand Prix Motors in New York and Grand Prix Auto Center in Miami are here for you. Both companies offer high-quality services, affordable prices, and flexible terms depending on your needs and financial position.

The Key Questions to Ask When You Lease a Car for Business

You may be just one step from your first business car lease and still have some doubts. In this case, you may answer some questions to make sure you do everything right.

Here is your checklist:

• What is the best type of vehicle to meet the needs of your business? Should your track or van be new or used and should there be any customizations permitted with the terms of your lease?
• Are you going to sign the deal in your business name, the name of the finance company, or your own name?
• What is the mileage allowed, does it fit into your business goals, and are there any excess mileage charges?
• Is it possible to incur any charges for excess wear and tear or upfront fees and how big are they?
• What is the car’s residual value and is it just what you need to drop your lease at the end of the period or buy out the vehicle?
• What are the payment terms and are they affordable?

So, leasing a car for your business may turn into a lucrative deal and serve you the best possible way if you weigh all the pros and cons and sign up at a reliable company.