Why Many Businesses Choose Car Lease as opposed to Buying

It may be that business car lease offers cheaper monthly payments than buying but in the long run, you know you will pay more money on a vehicle that is depreciating than buying it outright. So why do business owners opt for business car lease rather than saving a few pennies or dollars and buy outright?

One reason might be cash flow. Keeping money in the business rather than taking it put to buy a car can mean the difference between survival and death.  Another reason is clearly image; turning up to a client in a new executive car can generate business beyond the extra cost of the car. A further consideration in leasing new rather than buying used is the great fuel economy new vehicle s are delivering recently. In fact some are so good, you wonder how car manufacturers have been able to achieve this in such a short time, or maybe that always could have done this, but chose not to because the market did not demand it at that time.

The final consideration of leaving money in a business is deciding what you can do from a commercial point of view with that money. If there is a business argument that you can take £20k and make it into £40k in 3 years, there is a fundamental no brainer, why save a few grand on car lease when you can make £20k keeping the money in the business.
So when considering business car lease it makes sense to calculate the real cost of the car and what you can do with that money if you chose to lease.  If you loads of money on the bank, then it will be cheaper to buy, if you need that money to grow the business then business car lease could be right for you.

Driving Instructor Training Schools Selling The Dream

You can’t have missed the abundance of television adverts, telling us how easy it can be to be a driving instructor, how much we can earn, work our own hours and have a fully maintained car, for those who have never worked for themselves in the past, these adverts can appear to be the dream business to  give the standard of living they long for.

But like all businesses serious though should be made before entering into businesses and certainly some research should be done before handing over any money to a driving instructor school and certainly before leaving any secure job.

The first thing you should do, is research who is offering driving lessons on your area and ask yourself, is there enough space for you to enter this arena? Driving lessons is a very local thing, students do not want to lose time during their lesson waiting for an instructor to turn up and the driving instructor does not want to travel far, to pick up a student.

You can get a feel to how busy or popular the competition will be by their prices and word of mouth from neighbours and friends who maybe have used the service. If the school is advertising lessons for £10 an hour, there is a hint that business is not brisk. However is they are selling lessons at over £20 an hour this should suggest they are not in any price war.

Of course where you live should also be a bearing. Living in a small village may not supply you with enough customers for your business, however being in a slightly larger village where you are the only instructor could mean your business becomes a god mine. no one outside the village would want to travel to your patch.

Maintained car means the word leased and of course you are paying for this, so do not get carried away with the TV adverts as if the car comes free. whatever you pay for the leased car, is what you are not earning as wages, so take this into account.

Working your own hours is against your earnings. You cant work less hours and still earn high amounts of money, so really you have a choice, work the hours your clients want, or earn less money, it is up to you.

Fleet and Business Breakdown Cover

It is very easy in these pushed times to save a bit of money here and there, but it is important to make sure that those few pounds saved does not end up costing you more in the long run. An example of this is keeping those fleet vehicles on the road or even those commercial vans used for delivering goods. It is important to calculate how much it cost your business if for example a delivery vehicle were to breakdown 50 miles from it base. There are 2 costs to consider, first the costs of the recovery of the vehicle and the subsequent repair of the vehicle in labour. The second cost of course is the cost to the business. What would happen if on that day, 10 customers did not get their promised goods? How could we get those goods and the next days goods out with fewer vans the next day? Would you need to refund any of these products, what would happen if this occurred on a Friday and you needed to bring in staff on overtime over the weekend to fulfil orders?

This is just one example of how a business could lose out big time if they do not have insurance to take care of their stricken vehicles. Of course we are referring to good old fashioned breakdown cover here when we say insurance. Just as many of the National breakdown cover operators offer an emergency service to domestic cars, they also have special fleet and commercial services for businesses that need to stay on the road.

A typical suppler of business services is the AA. We know the AA as the largest breakdown cover provider in the UK but as well as delivering roadside assistance to motorists over the UK, they also attend business vehicles providing they have taken out a business or fleet vehicle policy.

This post is not a sales message, but it is an argument that you should at least consider the risks and balance out costs versus risk. The bottom line is when everything is ok, it is a saving, but should a spell of bad weather come along like recently, who knows what the value to you is.

Businesses Looking At Their Motoring Budgets

The motoring scene is changing as much for businesses than for the general motorists with new road tax changes to be applied in April, the recent scare in fuel rises than have now declined back to normal, plus the resalable value of any vehicle bought has new criteria to consider.

The car market is at its lowest peak for decades with new car sales nearly 50% in January; however this is challenged by the steady demand of used small economical cars, which have a history of lower deprecation.  The message seems to be that the modern family still needs a car, but is prepared to live with a smaller cheaper version, that will hold its value. As most new cars depreciate the minute you drive it from the forecourt, most savvy buyers are opting for nearly new instead.

This has a knock on affect within the business sector. As the company cars that businesses may have bought before, may now have a far higher depreciation value, add this to the higher road tax premiums and the volatility of the fuel market, it is not surprising that business are reviewing their vehicle budgets and processes and asking is their a better way during this credit crisis. Poor cash flow and a lack of confidence of being paid from customers also means businesses want to keep that money in the bank.

The response has been an increase in business car lease quotes. Although many businesses have gone down the business lease option for a while now, many others have refrained, assuming that it would be cheaper to buy themselves and maintain themselves. But now, with a need to keep cash in the bank to cover unforeseen circumstances, many companies are looking to calculate monthly payments, rather than a buying outright.
The added benefit is the new eco friendly vehicles that are appearing on car lease companies lists. One example is the Blue Motion range from Volkswagen, which is completely design to reduce Co2 emissions and give excellent fuel economy. The savings can add up to thousands a pounds per year when calculated and in some circumstances the savings could match the cost to the car lease contract.

The short term benefit for those who currently own their vehicles is that and money raised from selling their existing vehicles, goes straight to the bottom line.