Leasing may better suit certain lifestyles and tax situations.
For instance, if you entertain business clients, leasing allows you to drive a luxury vehicle for less money (and there may be a tax write-off for certain professions). Other people just like to drive a brand-new vehicle every two or three years.
So ultimately, leasing isn’t simply a question of dollars and cents - it’s about personal tastes and priorities.
There are many reasons why leasing is a great financing option for businesses and professionals.
Leasing allows you to conserve cash and leverage up the buying power of your operating or capital budgets, thereby overcoming budget limitations. A $30,000 vehicle budget is leveraged up considerably through leasing.
Unlike most traditional financing, in most cases you do not make any down payment upfront.
You only pay GST and PST on the monthly lease payment rentals. You DO NOT prepay the total taxes on the vehicle in full, up front.
Valuable cash and credit lines are preserved to grow your business. No one in business experiences financial difficulty because they have too much cash.
In many instances, leasing provides income tax benefits and the assets do not appear on the balance sheet. Debt to Equity ratios are unaffected.
You establish vehicle costs in today's dollars, and pay these costs incrementally in inflated future dollars, as the vehicle is used. You can add extra equipment and accessories for very small monthly costs.
You can match revenues with expenditures by paying for the vehicle while it is used to generate revenue, or protect profits.
The process is simple and convenient. You achieve 'one-stop' shopping for the vehicle and financing. Credit approval and lease documentation is uncomplicated and can be completed very quickly.
Repayment can be tailored to your cash flow. Budgeting is simple.