Make Business Car Leasing Work For You In 2022

Make Business Car Leasing Work For You In 2022

The 21st century business climate is challenging enough without the various obstacles presented by the last couple of years; namely the pandemic, Brexit and economic uncertainty. Even the unforeseen petrol crisis may have dealt your business some severe supply issues when you least needed them. So as we go into 2022, you need to be managing your business in the most cost-effective way, and that includes managing fleet costs and how they affect the business.

In this respect, business car leasing is the best way to manage your fleet so that the business is minimising costs and carrying as little financial baggage as possible, while still being able to operate efficiently and with room to expand the business according to your goals and objectives. So what are the benefits of business car leasing and how can your business take advantage?

Improved cash flow

Whether you use vehicles for deliveries, for transporting people, equipment and materials or simply for people to attend meetings, by not buying the vehicles outright you are improving the cash flow of the business. A depreciating vehicle is a large liability on the balance sheet which could affect your credit rating. But by leasing you require less money to be spent upfront and can manage your motoring costs and fleet budgeting much easier. You face one fixed monthly cost, for a known and finite period, and this frees up cash to be spent elsewhere in the business, where there may be more pressing needs.

Managing depreciation

The cost of leasing a vehicle factors in the element of depreciation over the duration of the lease, because the fixed monthly cost you pay is a fair reflection of the asset you receive and use. By leasing a vehicle rather than buying it, you don’t need to worry about the reducing value of the vehicle, how to dispose of it, about reclaiming the money you have spent on it or any risk of negative equity.

Your duty to your employees

Leasing a vehicle through Pink Car Leasing helps with safety and compliance because you are always leasing a new vehicle using our range of approved manufacturers. Offering employees used vehicles means you have limited knowledge about their past use and present condition, while leasing new vehicles allows the business to vet their quality, manage service and maintenance from new and take advantage of the very latest developments in safety technology. Furthermore, new cars come with warranties and the cost savings on leasing mean the employee can be driving a better quality of vehicle than they would ordinarily be able to afford.

Cost efficient

The bottom line costs are what you need to manage, and with a new lease car that means you can enjoy better fuel efficiency compared to an old car, and if you choose an electric vehicle there are additional tax advantages also.

VAT Breaks

There are various tax benefits for businesses operating company vehicles. Business leasing is cheaper than personal leasing because a VAT-registered business can claim back at least 50% of its initial and monthly VAT costs if the vehicle is used equally for personal and business needs. If it is used 100% for business needs, you can claim back 100% of your costs.

Corporation Tax

Limited companies can claim back 100% of their VAT costs for excess mileage payments, maintenance packages and zero-emission electric vehicles against corporation tax.

Fleet Costs

A business lease agreement comes with mileage restrictions, and this means the business has to more closely monitor journey planning, driver habits, fuel efficiency and the suitability of certain vehicles for certain jobs. This all leads to better fleet management and a more cost-effective way of managing the business. Furthermore, the business may be able to benefit from bulk deals in leasing a fleet of vehicles together.

So overall, there are several ways that a business can benefit from a business leasing deal, and can use this agreement to better manage drivers, vehicles and operations to help the business become more lean and efficient to face the many challenges of 2022.

Contact Pink Car Leasing today and we can talk to you about business car leasing.