How Car Leasing Works for Small Business?

Just because you’re running a small business, it doesn’t mean you’re not facing big operational expenses. For a business that’s paying to keep a vehicle fleet rolling, whether for sales reps or general purpose, having cars on the balance sheet can be a constant drain on your profits. Buying a car for small business purposes has different implications than leasing, which is why it’s smart to work with a respected company offering options for car leasing in Toronto.

Making a business decision to buy a car or multiple cars outright means either paying cash or taking out a loan for an amount your business will have to pay back – even if the value of the car drops below the amount of the loan. This is usually the result of standard depreciation, excessive mileage, wear and tear from lack of preventative maintenance or collision damages. Working with a company that provides car leasing services can help your small business reap the advantages of leasing, saving you money and helping ease the burden on your liquid cash flow. For example, when you are leasing your vehicles, the residual value at the end of the lease can actually lower the lease cost, and if you’re on a closed lease you might actually walk away without having to pay a penalty. Companies that specialize in commercial vehicle leasing can help small businesses understand all the nuances involved in leasing, guiding them to ensure they avoid the initial cash investment associated with buying.

Vehicle ownership is different for businesses, because there are tax benefits associated with owning a vehicle. A leased car typically doesn’t provide your business with any tax benefits related to depreciation, for example, while that’s a standard tax break for business owners. You can deduct mileage expenses for both leased and purchased vehicles, and leased vehicles may have mileage limits that can result in large penalties at lease end. As an owner, making the decision to lease or buy many also depend on who is driving the car.

When contracting car leasing Toronto services, look for a leasing partner with a long track record of success dealing with multiple types of businesses. Your leasing partner should understand your unique situation, and be able to provide a customized solution no matter how small your small business needs are in terms of vehicles. A well-connected commercial vehicle leasing company should be diverse and able to provide your small business with a number of options that suit your needs and your budget.

When your company is looking for a leasing provider, your first choice should be Jim Peplinski Leasing, a trusted Canadian leasing company.