Leasing a Car for a Business

Mark Etinger
SubmitYOURArticle.com
March 27, 2011

Mark Etinger
http://www.ajaxunion.com

Leasing a car is often an option that people equate to individuals needing wheels without spending the full price on a new car. But it can also be beneficial for businesses as well, especially small start ups that may not have the funds to buy a brand new model. But how do you go about leasing for a business?

First, consider where in your budget leasing a car comes into play. Always make sure that you aren't cutting costs on anything more important just to have a pair of wheels. Work out how much you are looking to pay in lease costs and make sure you find a company that's going to offer close to what you are willing to spend. Don't compromise if it'll hurt your overall bottom line.

As far as car leases go, a business car lease can reap benefits at tax time which is another thing to keep in mind. Of course, this only counts for business uses so if you feel you may use it for personal errands, it's best to stay away from that completely. But as long as you are using it for business, most expenses can be written off which includes monthly payments, repairs and insurance. Look into what you can do during tax time in your state before leasing.

In the cases of tax breaks, signing an open lease is a better option than a closed one. An open lease means you are paying out of pocket for mileage, gas, and other expenses. Those can eventually be deducted. If you have a closed lease you won't have any of those expenses to deduct later on.

Consider the annual mileage you will be allowed on your lease. Make sure you get a definitive number before signing car leases so you can decide whether it's enough or not. Sometimes business trips take you further than expected, especially if you'd rather drive than spend money on an otherwise short plane flight or equally more expensive transit. You can pay for additional mileage for the year up front, or you can pay for the extra miles at the end of the lease. Still, it's best to have an idea of how many miles you think you'll be traveling ahead of time so you can budget accordingly.

Make sure that you are well educated in the process before signing leasing a car for the company. After all, you don't want to it come back and bite you financially. But it can be a huge help when you need easy transportation for business.

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