Auto Leasing Provides Recession Lifeline

Many businesses traditionally support their transportation needs by purchasing vehicles from local dealers. Being local means that they are ideally located to support servicing and maintenance. Business will usually negotiate a significant discount due to the quantity of vehicles required and the ongoing business they will be providing to the supplier.

The current recession is prompting many businesses to look at alternative ways that they can provide and finance their transport needs.

Accountants and finance departments want to cut costs but, obviously, this must be achieved without any impact on the profitability of the business. Lots or businesses are rethinking the provision of company cars. Instead of providing their executives and sales people with their own dedicated company car, bought from the local dealer, many are turning to business car leasing arrangements. Some are choosing to use a car pool of leased automobiles that can be used by any member of staff who needs a vehicle.

It has been estimated that the leasing approach is saving businesses between 20 and 60% when compared to their previous transport costs.

The same approach has been adopted by many companies requiring commercial vehicles. Leasing vans and trucks is not new to business but was previously primarily used by larger organizations. Many business are resorting to automobile leasing as a way to cut their regular transportation costs during the current recession.

Businesses can really benefit from the many advantages that leasing provides over outright purchase. There are tax advantages for most businesses and the fixed monthly payments help accountants to budget their transport costs.

One of the main disadvantages is that the business never actually owns the vehicles which remain the property of the leasing company. Another potential disadvantage is that you must generally estimate the anticipated mileage and if this is exceeded significant costs can result.

If you are a business, of any size, you would do well to research how much you could potentially save and the advantages that vehicle leasing could bring to your business.