Many businesses follow a traditional path, buying their vans and cars from local automobile dealers. Locally based garages are generally favoured as they are idally located to provide servicing and maintenance when required. Business will usually negotiate a significant discount due to the quantity of vehicles required and the ongoing business they will be providing to the supplier.

But the current economic gloom is making many businesses rethink the way in which they finance their transport needs.

Business accountants want to cut transportation costs, but this must be achieved without risking profitability. Lots or businesses are rethinking the provision of company cars. Instead of providing their executives and sales people with their own dedicated company car, bought from the local dealer, many are turning to company car leasing arrangements. Some businesses are now using a car pool of leased vehicles rather than providing dedicated company cars.

It is estimated that as much as 20 to 60% can be saved by leasing rather than purchasing vehicles for business.

Leasing rather than buying is the approach taken to vehicle finance taken by many businesses that make use of commercial vehicles and vans. Leasing vans and trucks is not new to business but was previously primarily used by larger organizations. Many business are resorting to automobile leasing as a way to cut their regular transportation costs during the current recession.

Businesses can take advantage of the many advantages that leasing can provide. There are tax advantages for most businesses and the fixed monthly payments help accountants to budget their transport costs.

One of the main disadvantages is that the business never actually owns the vehicles which remain the property of the leasing company. Another potential disadvantage is that you must generally estimate the anticipated mileage and if this is exceeded significant costs can result.

If you are a business, of any size, you would do well to research how much you could potentially save and the advantages that vehicle leasing could bring to your business.

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