If your growing business is doing particularly well, you may be thinking about expansion. To do so, you will need to employ additional people in a sales capacity, and they will need to spread out across the region to solicit new business. For them to be most productive, you will need to supply each employee with a car, and you need to work out how you're going to finance the purchase of these vehicles. In most cases, it doesn't make sense to use cash flow to buy vehicles outright, but rather to spread payments over time. The question remains, however: should you take out a loan or sign a lease?
Choosing the Vehicles
To begin, you need to determine what type of vehicle is best suited in your situation. Think with your head and not your heart and decide based on employee comfort, as well as practicality. If they're going to be spending long hours behind the wheel, then you may need a vehicle that is more comfortable to drive, while if they're going to be spending a lot of time driving in urban situations, you may need a smaller vehicle that it easier to park and manoeuvre.
Sizing Up the Benefits
Once you have done all this, you can choose your method of financing.
Loan Options
When you take out a loan to buy a car, you will have an extra degree of freedom to personalise the vehicle and decide how you use it. You can talk with your financier about different repayment options as well, such as variable or fixed-rate loans or residual payments.
Leasing Alternative
On the other hand, when you lease a car, you have other degrees of flexibility. For example, you may not be required to put up as much cash in the beginning, and the monthly repayments may be lower, as you are paying for the usage of the vehicle and not the actual vehicle itself. Typically, your monthly payment will include a maintenance package, which can take a lot of pressure away when it comes to figuring out monthly expenditures.
You should talk with your accountant to see how this may benefit you from a tax perspective, and in most cases, you won't be liable to pay GST.
Many business owners choose this option, as it gives them a lot more flexibility. They're not committed to the ownership of the vehicle and may be able to upgrade it to something with more modern technology down the road.
What's Best for You?
Before you commit one way or the other, chat with car financing experts to see what would work best for your growing operation.
If you are looking into purchasing a new car, you will want to be certain you are getting the best deal. When I decided to bu my first car, I didn't know the first thing about how to interact with auto dealers or what special offers and discounts I should look out for. Thankfully, my older brother who knows a lot about these things came along with me and offered lots of help. I got a great deal on a new car and I am really happy. I hope that the articles on my blog help you to find the perfect auto deal.