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A vehicle can be useful to a company in a variety of different ways. For instance, it can make it easier to deliver goods to customers without putting wear or tear on your own car or truck. Allowing employees to drive the company car could be a reward for a job well done. If you are going to get a car for your business, should you lease it or buy it?
Leasing a car may be best for small business owners because the monthly payments are lower. Furthermore, you’re only committed to the lease for two or three years, which means you can turn it in quickly if it doesn’t fit into your long-term business strategy. Finally, leasing a vehicle can be a good idea if you want a luxury model to drive to business meetings or other special events.
Buying a car may be in the best interest of your business if you plan on driving it a lot. Typically, leases only allow you to drive up to 12,000 miles per year without incurring any additional fees. Another benefit to buying a vehicle is that the monthly car payment is generally considered a business expense. Look for a Nissan dealership near you to find commercial vehicles perfect for deliveries or a vehicle with great mileage if you travel for work. Maintenance costs and depreciation could further reduce your company’s tax bill.
It is possible to purchase a car at the end of the lease period. At that time, you will either pay the car’s residual value or take out a loan to finance that amount. Therefore, you can consider a lease to be akin to a trial run for an asset that your company may want to own for many years to come.
If you choose to lease a vehicle, the leasing company may charge extra for any excess wear that you put on it during the lease period. That could be a deciding factor if you run a construction business or otherwise plan on driving it in areas that are dirty or have poorly maintained roads.
Regardless of whether you lease or buy a car for your company, it is important to consider how it will help your business in the long run. Ideally, any investment that you make into a business asset will yield some sort of direct or indirect return either now or in the future.