Benefits of Corporate Car Leasing for Company & Business

Should you Buy or Lease a Company Car? Benefits of Having a Corporate / Business Car Leasing Program
Whether you’re a part of your Company HR / Admin team, Salaried Employee or a Small Business Owner considering a new company car for yourself or for your company, you should definitely compare the pros and cons of leasing vs buying a company car in India.
Car Leasing is an alternative way of acquiring a vehicle as compared to traditional car loan or outright purchase. Leasing a car allows you to drive a new car for an agreed duration between 2 to 5 years at an agreed monthly rental.Car leasing is effectively a long-term rental of a brand new car at a monthly payment comparable to car loan EMI with some additional benefits. Read more to know about the benefits of leasing for your company and their employees as compared to buying a new car.
Benefit of Corporate Leasing Program For Your Company
-
Affordable and Attractive option for your employees to travel safe and securely
-
Helps in offering tax efficient compensation with higher take-home salary to attract & retain talent
-
Flexible tenure from 24 months to 60 months
-
Dry / Wet lease with insurance,service and maintenance packages according to your need. The options include
-
Vehicle Recommendation, Test Drive Management & Procurement
-
Employee Tax Benefit Calculation
-
Comprehensive Insurance, Automated Renewals and Claims Management
-
Tyre & Battery Management
-
Scheduled Maintenance, Service and Breakdown Repairs
-
Foreclosure, Vehicle Disposal
-
Low risk programs to make the company car policy almost risk free to the employer - Bi-Party, Tri-Party, Tri-Party with Automatic transfer agreement
-
Easy return with no worries about selling the asset and risk of residual value realization
-
Off Balance sheet funding – frees up capital for better leverage
-
Reduced vehicle procurement and management cost
Benefit of Corporate Leasing Program For Employee or Business Owner
-
Tax Savings - Lease rentals are deducted pre-tax from CTC (gross salary) increasing your take-home salary as compared to having a car loan
-
Incase of business owner leasing a car, Monthly lease rental payments are tax-deductible as an expense reducing your profits and consequently, the taxes that have to be paid.
-
Zero Down-payment thus saving opportunity cost as compared to outright purchase or car loan
-
Attractive lease rental with special offers and discounts
-
Convenience – Option to cover all the vehicle services , maintenance and repair of the vehicle e.g. insurance, regular service, replacement car, pick up & drop service, road side assistance.
-
No hassle of selling your used car after 5 years
-
Option to buy the car at the depreciated value at the end of lease period.
Disadvantages of Leasing as Compared to Buying a Car
-
Mileage limitations - Most lease contract limit driving mileage of upto 20,000 km a year. So for example If you've driven more than 80,000 km at the end of a four-year lease, you could be charged an additional cost per km over the limit.
-
Leased vehicles generally can't be customized
-
There may be additional charges incurred for Early termination or Excessive wear and tear due to careless driving habits or improper maintenance
-
When you buy a car on loan, chances are you can qualify for financing with a lower credit score as compared to leasing a car
Are you or your company planning to buy a new car? There are some questions you should answer to ensure that you make the right decision.
1. Does your Company have an existing leasing program for their employees?
2.Are you or your company eligible for corporate leasing program to avail the tax benefit? – Check out the Documents Checklist For Car Leasing Application & Approval
In case your employment contract allows up to avail a company car as a part of your CTC salary, you will be eligible for tax benefits as monthly lease payments are tax-deductible expense.
3.How many km do you drive?
A lease is preferable if you expect to use the vehicle between three to five years and drive up to 20,000 km per year. Standard Lease agreement typically comes with the option of driving 5,000 km / 10,000 km / 15,000 km / 20,000 km per year with flexible lease period of 24 months, 36 months, 48 months, 60 months.
4.How much money do you have for a car down payment?
In case you are planning to buy a car, you will need a bigger down payment. Factor in about 20-25 % of the total on-road price including taxes, insurance and registration charges of your Car or SUV for a down payment as compared to zero down payment while leasing a car.
5. Are you concerned about the maintenance, service cost and hassle of selling the used car after usage?
Once you answer the above questions, you should weigh the pro and cons of each option. The key in deciding whether to lease or buy a car comes down to four main points: Eligibility, Cost Advantage, Time / Effort Needed and Ownership Experience.
Leasing a new car is easier than you think. Request for a free non-binding car lease quote from best leasing companies in India with a click or just have questions about how leasing works? Request a call-back or email us at contact@mynewcar.in for our leasing specialists to help and answer your questions
Explore MYNEWCAR.in. We are an online marketplace which simplifies the car buying process by providing a transparent, convenient & safe purchasing experience.





LEAVE A COMMENT