Luxury cars make all the difference for businesses looking to stand out among competitors.
They aren’t just a means of transportation; they also serve as status symbols and an excellent means to boost workplace productivity by providing quality customer service.
Many businesses use luxury cars to impress existing and potential customers. However, they are pricey. Leasing a luxury vehicle for your business is a cost-effective alternative to purchasing or taking out a car loan.
Here are some of the reasons why leasing a luxury vehicle is cost-effective for businesses:
- Reduced cash outlay
- Lower costs of maintenance
- Lower taxes and tax write-offs
- Higher residual value
- Business discounts
5 Ways Leasing a Luxury Car is Economical for Businesses
High-end cars are classic status symbols. Leasing the newest, fastest, and most exotic vehicles helps save costs and expenses for your business in the following ways:
1. Reduced cash outlay
Luxury cars are high-end vehicles that cost a fortune to purchase. Buying a luxury vehicle for your business operations can significantly affect your capital, meaning more cash outlay. However, with luxury car leasing, you are only required to make a deposit, after which you must make monthly payments during the lease.
This lowers your initial cash outlay or expenses, while freeing up additional credit for your business. You can inject this credit into other areas of your business, boosting productivity.
You can get started by checking websites like leaseloco.com for luxury car deals.
2. Lower maintenance costs
Another way luxury vehicles help lower business costs is through reduced maintenance costs. They’re not only expensive to buy, but they are also costly to maintain. Luxury car leases are covered by warranties such as manufacturers and bumper-to-bumper warranties.
These warranties cover various repair and maintenance costs. This means the manufacturer or dealership bears the costs of oil change services, changing or repairing brake pads, wiper blades, and other minor services.
Dealerships and manufacturers include repair and maintenance services under a lease agreement to increase the chance of getting back their luxury vehicles in premium conditions at the close of the lease.
You benefit from this arrangement because this reduces the expenses you would undertake while using the car. However, properly review your lease contracts to understand which maintenance and repair costs it covers.
3. Lower taxes and tax write-offs
Another reason why leasing a luxury car is cost-effective for businesses is the tax benefits attached to leases. Leasing an exotic car for business purposes entitles you to lower taxes and tax write-offs under certain conditions.
If your luxury vehicles are deployed primarily for running the business, you will be entitled to 100% VAT. However, if your car is used for other purposes outside business exercises, you will only be eligible to recover up to 50% VAT on your lease payments. In any case, you will still be liable to reclaim your VAT.
For any of these to apply, you must be VAT registered under the relevant body. It is also advisable to consult your accountant or a financial advisor before making any tax decisions.
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4. Higher residual value
High-end vehicles offer the best lease value than any other class of cars. This is due to the high residual value of these cars – their ability to retain their value after the end of the lease.
This is why most business owners prefer leasing luxury vehicles over outright purchasing. High residual value results in lower monthly lease payments, saving you money.
This eliminates the likelihood of depreciation costs since luxury cars are known for retaining their value after the lease period. For example, the Porsche 911 is one of the top 10 least depreciating cars.
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5. Business discounts
Although leasing is cheaper, luxury cars still cost more to lease than regular cars. As a result, lessors create incentives and give discounts to encourage people to lease luxury cars.
Businesses can take advantage of these discounts to lease vehicles—this way, they save money that the company can reinvest towards growing growth and development.
Luxury cars add glitz and glamour to your business operations. Leasing a luxury car for your business is a cost-effective alternative to buying a car. This helps you to preserve your cash for other productive purposes.