Leasing vs Purchasing a Business Vehicle with Finance

Leasing vs Purchasing a Business Vehicle with Finance

When acquiring a business vehicle, you might be faced with a choice between paying cash, leasing or financing the purchase. Each approach has it benefits but as always the best approach is the one that meets your unique requirements and preferences.

Here is a short guide for those considering the lease vs. financing a purchase.

Leasing a Business Vehicle

Leasing involves paying a monthly fee to use the vehicle for a set term, with the option to return or purchase it at the end. It’s ideal for businesses wanting lower upfront costs and frequent vehicle upgrades.

Benefits:

• Lower Payments: Typically lower monthly costs than financing.
• Tax Deductions: Lease payments can often be expensed.
• Upgrades: Easier access to newer models.
• Maintenance: Often covered by warranty.

Financing a Business Vehicle

Often called a chattel mortgage, financing involves taking a loan to buy the vehicle, which you own after the loan is paid off. This is suitable for businesses wanting long-term ownership.

Benefits:

• Ownership: The vehicle becomes an asset.
• No Mileage Limits: Use without mileage restrictions.
• Customisation: Freedom to modify the vehicle.
• Savings: Can be more cost-effective long-term.

Decision Factors

Consider cash flow, upgrade frequency, and long-term strategy. Leasing offers lower costs and flexibility, while financing provides ownership and potential savings.

If you're interested in finding out more about either funding options, please get in touch with the One Yard team.

We'd be happy to answer general questions, and can also provide free quotes and pre-approvals.

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