Your business is most likely at the point where you have to decide: should you buy company cars or lease them for employees?
The answer is yes, you can lease company cars for your employees, which benefits both employees and the business. Continue reading to find out why and how.
Why Should You Consider Leasing Company Cars for Employees?
Company car leasing comes with no hidden costs and fewer financial commitments. As well as these direct benefits to the company, leasing company cars can boost business productivity.
Several factors combine to help businesses make profits. Customer and employee satisfaction are two aspects of business that forward-thinking companies pay good attention to. Luckily, both factors are linked, and promoting one usually caters to the other.
Customers can only enjoy an outstanding experience if they get it from good products or services that employees render. Employees will be motivated to work towards customer satisfaction if they are well-equipped.
Leasing company cars for employees is an assured way to drive productivity by keeping employees happy. With enhanced productivity, the business will certainly see returns in the form of profits.
How Does Company Car Leasing for Employees Work?
Leasing company cars for your employees is a straightforward process.
Your company rents the cars for some years and hands them out to employees as company cars. When the contract expires, you return the vehicles.
The choices of the company cars for employees are numerous. The company may opt for new or used cars, from BMW 2 series leases to several other car options. Regardless of the car model, the lease terms are simplified and binding to all three parties involved.
How Long Does a Lease for Company Cars Last?
You can decide on a convenient time-frame with the leasing company, but the usual duration is between 3–5 years.
The whole aim of leasing is that the company does not intend to own the cars for a long time. Between 2–3 years should be convenient for most businesses since they can take another lease after one expires.
During this period, the company makes repayments in small amounts rather than the huge sum that purchasing a company car would have cost. Leasing company cars give the business enough time to allocate its resources in the most beneficial ways,
What Additional Costs Come With Leasing Company Cars for Employees?
Businesses that purchase company cars for employees must be responsible for the car’s maintenance and repairs. However, the finance company takes care of these extra costs in a lease agreement.
Insurance rates tend to be on the high side with leased vehicles since companies obtain the cars when they are of high value. If theft or damage occurs, insurance companies mostly pay back the market value of the car rather than the payments left on the lease.
Do Company Car Leases Come with Mileage Restrictions?
Like all car lease agreements, you will get mileage limits when you lease company cars for employees. Annual mileage limits can be anywhere between 10,000 – 15,000 miles.
If your employees exceed this limit, you will have to pay the extra costs at the end of the lease. Otherwise, all you are paying for is the depreciation on the vehicle.
Something that stands true is that at the end of the lease, your company will not deal with selling the car. You pay the extra cost on the exceeded limits and decide whether or not to take another lease.
How does Taking a Corporate Car Lease Benefit the Company?
There is the aspect of enhanced productivity since employees can escape the challenges of commuting via public transportation. Employees who spend less time and effort commuting can focus better on work tasks.
Leasing company cars for employees means the company does not have to invest in owning cars. Funds can be put instead to profit-generating business activities.
Employees will be safer and more motivated to work if there is a company car that enhances their security. The result is increased organisational productivity.
Leasing is a viable option for growing businesses that need to divert money into sources that increase revenue. There are several benefits associated with leasing company cars for employees. If your company does not have a corporate car lease policy, work with a leasing company to create one.