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Lease or buy business vehicles?
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Lease vs Buy
Many businesses debate whether to lease or buy their cars.
Where financial stability and minimising exposure to loss is important, leasing is a very popular business strategy.
Choose leasing and you can remove asset ownership and depreciation risk; ensure known, fixed operating costs; provide cash flow certainty around a significant business expense; and boost your balance sheets.
Leasing v Ownership whitepaper
View an overview below or, for more details, download our whitepaper.
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Tax advantages
Rental price is tax deductible on operating leases where the cars are used to generate taxable incomeNo extra security requirements
No extra loan covenants or guaranteesUpgrade assets more regularly
Reduced running costs, improved driver morale and corporate image as well as improved safety and technology.Volume discount benefits
Leverage LeasePlan’s purchasing power, not just on vehicle procurement but on all running costs as well.Total package
Include all essential fleet management services, consultancy and advice from fleet management experts.Know the benefits
Known, fixed costs
Remove the hassle of unexpected cost spikes during servicing and other ad-hoc vehicle expenditure with a flat monthly lease rate.Off balance sheet
As LeasePlan is the owner of the vehicle, you can remove the vehicle asset from your balance sheet to streamline reporting processesConserve capital
No capital outlay means the funds that were allocated for vehicles can now be put to other useImproved cashflow
By not having to accrue capital for purchasing vehicles in a lump payment, cashflow will become more even each month. -
Chattel mortgage vs lease
A chattel mortgage is a common way Australian businesses finance cars. It is a commercial finance product where a financier lends the money to buy a car and the customer makes regular repayments.
With a chattel mortgage, you are financing the car and take the risk for the re sale value at the end of the term. Finance is covered in your monthly payment, but you take responsibility to manage all vehicle operating costs (registration, servicing, tyres, etc.) separately.
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Operating lease
Like a rental, only pay for use of the vehicle.
Finance lease
Vehicles are purchased by the lessor on behalf of the lessee.
Which lease is best for my business?