Your Accountant Will Agree: Leasing a Car For Your Business is the Way To Go
By Tom Kline
One of the many important financial decisions of a business owner is whether to lease or purchase motor vehicles for the business. RK Auto Group recommends leasing for several reasons: Leasing strengthens your financial statement and upgrades your company's image by providing sharper-looking vehicles at a cheaper price.
Most accountants agree: your financial statement looks rosier with vehicle leasing.
Financial benefits of leasing include:
- A better tax write off - you can deduct actual payments instead of using a depreciation schedule
- Clearer bookkeeping - while a lease is simply an expense on the financial statement, a purchase is an asset and a liability
- More borrowing power - with a lease, you can keep lines of credit open for other expenditures; a purchase of a vehicle ties up those loan options
- Preventing negative equity - this happens when you purchase a car: sometimes the market conditions make the vehicle worth less than the debt owed on it
- When you don't have negative equity you have less to negotiate in leases
When you lease a vehicle, you don't pay for all of it. You only pay for the part of the vehicle you use. This means:
- A lower monthly payment
- You can afford a more expensive vehicle to better represent your business (and it's more fun to drive!)
- You drive a new vehicle more often: a 48-month lease costs the same monthly amount as a 60-month purchase of the same vehicle!
When you lease a vehicle, you form a strong relationship with the leasing representative, because you work with the same person on every lease. Leasing provides a satisfying experience as well as great financial benefits to your company.
© 2006 RK Auto Group
Tom Kline is Controller of RKAutoGroup.net (RK Buick, RK Chevrolet, RK Subaru, RK Scion and RK Toyota).
During his 15-year tenure Kline has worked in the Sales Department of RK Auto Group, Parts, Service and Body Shop, Leasing, Collections, and Management Information Services.
RK Auto Group, located in Southeast Virginia, has been recognized as one of the top 100 Chevrolet dealerships in the nation. Founded in 1964, this award-winning dealership sells approximately 9,000 vehicles per year.
RK Chevrolet is the recipient of Chevrolet Motor Division's coveted Service Supremacy Award four years in a row. This is an award which less than 8% of the nation's Chevrolet dealers have won. In 1998, RK received the prestigious "Genuine Leaders Award" for excellence in sales, service, and customer satisfaction.
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