Pros and Cons of Leasing a Car for Business

There are two types of car leasing. One is called a closed-end lease where the lessee returns the car after the lease term. The other type is called an open-end lease where the lessee purchases the car for a pre-arranged price.

car leasing for businessWhichever type of lease you wish to obtain, it is important to weigh the pros and cons of leasing a car for your business. This way, you’ll know what to expect and what not. Let’s talk about some of the bad points and good points of car leasing:

Advantages of Leasing Vehicle

Cut Costs. Purchasing a car is very expensive. In contrast, car leasing does not require a down payment and usually comes at a very low cost. Usually, when leasing, you’re only required to pay a refundable deposit, registration fee and monthly payment. By leasing vehicle, you’ll only have to pay a monthly rent for the car while using the car at the same time. Paying for monthly lease taxes are also much easier on the budget compared to a huge sales tax.

You can simply return the car or buy the car at a lesser cost. Once your leasing term is done, you can simply return the car back or if you want to keep the car, you can get it at a much lesser price.

Better Deals. You can avail of better deals from car manufacturers. Most manufacturers are willing to give away the car at very low prices.

Easier than obtaining a car loan. Car leasing is much easier to avail than a car loan. A loan entails more complicated processes and may require a lot of documentation. With a car lease, it is possible to obtain a high quality car at a more affordable cost than seeking a loan to purchase a new one.

Disadvantages of Leasing Vehicle

You Don’t Own the Car. If you’re a sentimental type of person who gets attached to things, car leasing can be a bit difficult. If you’re the type who likes to own things, perhaps you should think about the matter very carefully.

High Cost of Insurance. Leasing usually comes with a higher cost of insurance. Thus, when leasing a car, it is important to inquire exactly how much the insurance fees would be before signing up your leasing agreement.

High Credit Rating is a Must. Those who have a poor credit score may not get approved since leasing companies do require an excellent credit rating to ensure the borrower’s ability to pay and credit worthiness.

Monthly Duties. It can a bit of an inconvenience having monthly bills to pay. If you find it difficult to pay your bills on time, this may pose a problem for you. Like all your monthly bills, it is very important to pay attention to your monthly lease.

Penalty Fees on Excess Mileage. Leasing companies put a restriction on the total mileage allowed each year and in case you exceed this limit, you’ll be charged with a penalty fee.

Elizabeth Roberts

Elizabeth Roberts

Liz Roberts and her team are continuously providing information to people who are ready to repair their credit and improve their credit score. Also NewHorizon.org team strives to empower the homebased and small business owners by bringing information that can help them to manage and grow their businesses. Let our 23+ years of business finance experience help you to get the financing you need! CONTACT US if need financing for your business.

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NewHorizon.org is an independent, advertising supported website. The owner of the site may be compensated in exchange for featured placement of certain sponsored products and services, or your clicking on links posted on this website. NewHorizon.org has not reviewed all available credit card offers in the marketplace.

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NHBS Inc © 2022

NewHorizon.org is an independent, advertising supported website. The owner of the site may be compensated in exchange for featured placement of certain sponsored products and services, or your clicking on links posted on this website. NewHorizon.org has not reviewed all available credit card offers in the marketplace.

Privacy Policy Terms of Use

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