The Many Types Of Car Leasing To Pick From For Companies ...

Businesses are offered a few different types of car lease. The first thing to do is understand the car lease. The biggest part of a lease car is depreciation. This is the basis for the lease. The depreciation defines the amount of monthly payments. The amount the value of the vehicle is reduced over the lease period is the depreciation.

Here are some interesting facts about depreciation. If the car depreciates quickly, the payments will be much higher. This is great for the company that is the lessor. If a car depreciates slowly, the payments are much lower. This is beneficial for the business that is the lessee. When the economy fluctuates, the depreciation of the vehicle will too. The make, model, and year also cause the depreciation to vary. Another factor is that depreciation is generally more rapid at the beginning of the car?s life. Usually, it evens out after that. Businesses usually use open-end leases. An open-end lease means if the vehicle depreciates more than anticipated, the business must pay an additional fee. A closed-end lease means at lease end the customer can simply walk away. This is whether the vehicle has depreciated more or less than expected. This type of lease is not generally offered to businesses. If a leasing company does offer a closed-end lease to businesses, it should be looked into.

Business contract hire is one type of lease businesses is offered. This type of car leasing is very common. This type of contract lasts 12 to 60 months. The contract details are designed to fit business needs. Contract hire leases are available with or without a maintenance agreement. There are several advantages to this contract. This will not appear on the balance sheet. It has fixed interest rates. The depreciation risk is nonexistent. This responsibility lies with the leasing company.

Another type of lease is a lease purchase. A lease purchase has some advantages and disadvantages. This type of car leasing has a smaller deposit. Also, the monthly payments are usually less. Instead, the company may put these funds back into the business. One of the disadvantages comes at the end of the contract. A large balloon payment is due at the end of the contract. It is very important to ensure the business will have these funds available at that time. The anticipated future value of the car is the payment due at lease end. The vehicle will then belong to the lessee. If the vehicle is used for business purposes only, it may reclaim the VAT.

An additional type of lease available is a finance lease. A tax efficient option for businesses is a finance lease. The company that is the lessor retains ownership of the vehicle. The balance sheet does show this type of lease. Interest rates and monthly payments are generally fixed. The significant factor of car and leasing options is to fully understand the choices that are available. The information will determine what the best choice for the business is. A second important factor is to completely understand the lease before signing it. Otherwise, the business can get into financial trouble. The purpose for leasing vehicles is to help the business grow.

To lease car go to Leasing Options. Leasing Options expertise in Audi lease.

Source: http://www.weight-watchers-uk.org.uk/2011/09/the-many-types-of-car-leasing-to-pick-from-for-companies/

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