Having a company vehicle is of utmost importance for many reasons. This includes being able to make timely deliveries of goods and services, sending employees on important client meetings, and doing creative marketing of your brand.

Now, as a new business owner, you might wonder whether you should buy a car or lease it. To help you out, here are the pros and cons of financing vs. leasing a vehicle for you to consider.

Four considerations for financing a vehicle for business:

Pros

• If your company owns the vehicle, it can be used as a fabulous marketing tool. You can paste the company logo, contact details, and products and services on the body of the car. What better way to advertise than on moving wheels?
• At the end of the loan tenure, you can sell the car or trade it in and get some value for it.

Cons

• A higher mileage can substantially reduce the value of the car when it comes to reselling it. Additionally, when cars are purchased for a business, chances are that they will be driven often.
• Financing your car usually requires a down payment. If you are just starting your business, arranging this kind of money might be a huge concern for you. In this case, you might want to opt for a lease.

Four considerations for leasing a vehicle for business:

Pros

• Leasing a vehicle brings many tax deductions for the company. These tax benefits are savings through the financial year.
• Your company can benefit from having a new car every year. With a lease, you do not need to worry about the depreciation of the vehicle and the hassle of reselling it. Simply drop it off and pick a new lease.

Cons

• Exceeding the mileage limit that is set by the lease company will make you pay more than the actual lease value of the car. This is an important calculation to make before leasing the car.
• If you lease a car that is to be used for picking up and dropping off goods, there may be wear and tear on the body of the car. This is especially true if you make a lot of long-distance trips. This wear and tear can be chargeable if it is more than what the lease company considers normal wear and tear.

These are the main pros and cons of financing vs. leasing a vehicle for business owners to consider. As an additional tip, if the owner of the business operates the car, it makes sense to lease it as the owner might take more care considering he is paying for the vehicle. If a driver is handling the car, auto financing is preferable. A vehicle is an important aspect of the mobility of your business. So, do make the right choice.