Taking the strategic decision to lease all types of vehicles for any corporate fleet can provide you with a range of advantages, especially when compared with purchasing vehicles outright. Indeed, the use of strategic corporate leasing can be used to revolutionise the way in which a small or medium-sized business manages its transportation requirements. Similarly, as a fleet manager, taking the time to understand these numerous benefits can could potentially have a significant impact on your internal decision-making processes as well as ultimately result in more efficient fleet management operations. As a result, you should continue reading this informative article because it will provide you with information about the three most important reasons to lease vehicles for your corporate fleet.
Reduction in upfront capital expenditure
To start with, one of the main financial reasons to undertake a car lease in New Zealand or Australia, especially in relation to the management of your corporate fleet, is the reduction in the amount of working capital that you will have to spend. Likewise, when you take the decision to lease vehicles, you can avoid the substantial initial expenditure that is often required to purchase the vehicle outright. However, this strategic decision can allow your senior managers to allocate your limited amount of working capital to other critical parts of the business, such as research and development or marketing, which can drive growth and innovation. Similarly, by conserving your working capital and maintaining a high level of liquidity, you can ensure that your business remains agile and responsive to any market changes.
Potential tax benefits
The second significant financial benefit of leasing any types of vehicles for your corporate fleet is the potential for tax benefits from the government. Furthermore, these types of payments can often be deducted as a business expense, which could potentially reduce the amount of taxable income that you will have to pay to the government. This means that the option of leasing vehicles not only lowers the immediate financial expenditure but also provides your business with ongoing tax relief throughout the term of the lease.
Lower fleet costs
Finally, taking the decision to lease all of the vehicles in your fleet can result in lower operating costs, especially as a result of reduced depreciation risks. Likewise, whenever you purchase corporate vehicles, your business will have to assume the full burden of depreciation, which could potentially have a significant impact on your annual financial statements and the values of your assets. However, the leasing process transfers this depreciation risk to the leasing company, because you will be able to return the vehicles at the end of the lease without worrying about any resale value.
- Reduction in upfront capital expenditure
- Potential tax benefits
- Lower fleet costs
To summarise, leasing vehicles for any type of corporate fleet can provide you with several financial benefits that could potentially enhance the achievement of your business’s strategic objectives, while by reducing upfront capital expenditure, providing numerous tax benefits and mitigating the risk of depreciation, leasing can enable your fleet managers to operate more effectively and cost-efficiently.
