In recent years, the car leasing has become very popular option for people cannot afford to buy a vehicle of their own. Many business organizations also are now realizing the advantages leasing out a car for their management personnel and employees rather owning one. The main reason why the clients of car leasing companies do not opt to purchase of a new car is that the value of the vehicle depreciates at a very rate over time. In many cases, the resalable value of such an automobile in the market is eventually equal to almost half its original value over time.
Omari Betts, a sale and leasing consultant for ChevyChaseAcura in Maryland, America, says most individuals and business enterprises find leasing a vehicle a more cost-effective option than buying one. Moreover, they have the option of negotiating special deals to their advantage with the corporate enterprise operating its business activities in this field. Many of these clients notice that the entire cost of their rentals over the period of the lease agreement is comparatively less the amount they need to pay to own a vehicle. Moreover, they have to take into account the fact that value of such an automobile will depreciate with time.
Why opt for a car lease – pros
He goes on to say that leasing a vehicle have the following benefits for both individuals and businesses:
- Fixed monthly installments
When people and companies opt to buy a new vehicle they need to consider the cost of operating it on the road. This is in addition to the price these individuals and enterprises have to pay to car showroom dealer. Apart from this, they need to keep aside a considerable amount of money for repairs, maintenance, insurance and rood tax. In vehicle lease agreement, the monthly installments include the above costs over the duration of the car lease.
- Mileage Allowance
In a car leasing agreement with a corporate enterprise, individuals and businesses can negotiate the cost-effective mileage allowance with the company’s representatives.
- Low initial outlay
The down payment most people and business organizations pay to a car leasing company is comparatively less than what they have to incur when purchasing a new vehicle.
- Free Delivery
The corporate enterprises leasing cars to the public take the responsibility of delivering these movable assets at the doorsteps of their clients.
The corporate enterprise conducting its business operations in the area of car leasing enjoy the following benefits:
- The organization can claim tax relief on the lease payments its receives from its clients;
- The management personnel notice an increase in cash flow because of the low initial payments and monthly installment they get from their customers;
- The administrative cost of leasing the vehicles with maintenance for such a company is very low; and
- The company can reclaim value added tax on the maintenance element of the car lease agreement.
Omari Betts explains that considering the above advantages for the clients and company renting out its vehicles to the public, car leasing is a win-win situation for both parties.