Economic uncertainty in light of Brexit, together with financial experts predicting another recession in the UK, SME’s have to find ways of cutting costs and managing cash flow.
Business car leasing could prove to be a valuable solution for many small businesses in the UK. With fixed monthly charges in plain sight, fund managers can fix budgeting plans with more insight and free up capital.
There are several key benefits for why business car leasing could be the answer to safeguard your financial future.
Business car leasing can help cut costs and avoid shelling out huge amounts of capital on investing in a fleet of cars. With advances in engine technologies piling thousands of pounds on to price tags, buying a fleet of cars has put a strain on many SME budgets.
Not only that, but the cost of owning a car increases year-on-year thanks to the government’s VED tax levies on CO2 emissions. Fleet hire gives you the option to save money on low-carbon engines that have emissions below 110g/km.
Business car leasing also enables you to navigate rising costs by offering tax breaks. When you enter a contract hire agreement, VAT-registered businesses are entitled to claim 50% back on VAT and 100% if the car is used solely for business purposes. Cars that are used for personal use are subject to savings on corporation tax.
Manage Cash Flow
Buying a company car or a fleet of vehicles requires a significant capital investment. SMEs that do not have sufficient resources risk financially hampering the future of their business.
Business car leasing covers you for monthly payments so you know in advance how much of your budget you need. You can reduce cost uncertainty further by adding maintenance cover and potentially swerve any unexpected costs for servicing and repairs that are difficult to quantify.
Access To New Fleet Vehicles
If you use a leading business car leasing provider like Toomey Leasing Group, you will have access to a wide range of vehicles for affordable monthly fees. This enables you to maintain a fleet that includes the latest models and provides your staff with vehicles that offer reliability, durability and superior fuel-economy.
New vehicles fitted with the latest advances in engine technology cost less to run – which also reduces their personal costs as they will pay the lowest band road tax on carbon emissions.
Wider Choice of Alternative Fuel Vehicles
With manufacturers building more and more alternative fuel vehicles (AFV) there is more choice in the market, so manufacturers and service providers have to offer the best deals on fleet contracts. As a result, there has been a rise in the acquisition of alternative fuel vehicles (AFV) among car leasing firms.
This is great news for SMEs as it puts them in a stronger bargaining position and gives them more options to acquire premium vehicles that are economical to run.
However, before investing in AFVs conduct some research to determine which is the best for your business. It’s worth noting that electric-only cars have a limit on distance and take longer to charge.
Business car leasing is not overly complicated and eliminates the mound of paperwork typically involved in acquiring a car. Although you will still need to organize your own insurance cover, most things are handled by car leasing firms.
Although many vehicle hire companies have a standard contract, SMEs have the option to add in maintenance cover and estimated mileage. These add-ons are easy to factor in although will increase the monthly charges.
If you have budget concerns, business car leasing is a no-brainer. In the current economic climate, it’s not worth investing capital and leaving your business at risk.