Company Car Leasing

If you want to purchase a company car on loan for some business purpose, then company car leasing is a great option. By the way, did you know that the Danish term for "company car" is "firmabil"? As an individual too, if you want a car for rent for a while, car lease is one great alternative.

car leasingCar lease and renting a house are almost the same. Any company that will finance your car, will purchase a car as per your choice. You can use the car throughout the term of the lease but some payment has to be paid monthly for the same.

The amount that you repay will involve tax deduction if the car on lease is used only for business purpose. Company car leasing involves decrease in the value of your asset or depreciation which accounts for the deduction of tax. At the end of the lease term, the reduced price of your asset becomes the residual value.

There are several benefits of company car leasing. For business vehicles, payments of leasing a car involve tax deduction. With the leasing a car option, you can change your car and purchase a new car on lease after a term of two years. You don’t need to stick to the same make of the car. Car lease gives you an idea about the interest and the payment which is to be made monthly so that you have a fair idea of the costs involved. Car lease payments are often easier to pay, than paying a car loan which becomes cumbersome. In car lease, the car is used as a security against the lease. Interest rates are often reduced as compared to a car loan. You can lease any old or new vehicle. Leasing car terms are flexible and vary between a span of 2-5 years.

There are different types of leasing a car such as; operated leasing, finance leasing and novated leasing. There is a minor difference between the first two types of car lease. In operated leasing, the lender of the car will retain the ownership of the car, once the leasing term expires. In finance leasing, you can pay the residual or balloon payment and assume the ownership of the car. A car lease which includes the running costs of the car such as cost of tyres, fuel, services etc. is an example of a finance lease.

The third type of company car leasing is called novated leasing. It is an agreement between an employee, employer and a company which provides the car on lease to the employee. The employer pays the monthly lease payments on behalf of its employee. The amount is then deducted from the pre-tax income of the employee. This practice is also called “salary-packaging” of the vehicle.

So, leasing a car is a great alternative for all those people who want the latest make of cars either for personal or business use. The use of leased cars can vary from personal, business or mixed use. For this reason you can always compare company car leasing dealers (or as referred to in Danish - "leasing firmabil forhandler"). Repaying car loan payments is cumbersome than paying car-lease payments. This basic benefit of company car leasing makes it a great alternative for all those people who cannot afford to purchase a car on loan.