Car leasing is an excellent way to provide your employees with a vehicle, making their commute stress-free. Not only does it make them more productive in the long run, but having a car lease scheme also works as an attractive incentive for new candidates.
Car leasing is better than traditional financial models because of advantages like easy credit approval, tax savings, and more. In this article, we will look at the benefits of corporate car leasing and understand why it is preferred by so many organizations today.
What is a Corporate Car Lease?
A corporate car lease allows businesses to provide vehicles for their employees without purchasing them. Companies pay monthly fees that typically cover the vehicle, taxes, and maintenance. This option offers tax benefits, no upfront costs, and flexibility to upgrade vehicles over time.
Advantages of Car Leasing
1. No Down Payment Needed
The car you obtain is financed by a leasing company. So, as a lessee, you do not need to pay any down payment amount while making the purchase. This makes the leasing company the primary owner of the vehicle. So, how does this work in your favour? Well, all car-related expenditure, such as accessories, on-road price, and insurance, is included in the lease cost, which is paid for by the leasing company.
2. Maintenance Benefits
All vehicles are subject to wear and tear. With time, their maintenance and repair costs rise.
When a leasing company leases a vehicle, there are two kinds of arrangements, with maintenance covered called wet leasing and without maintenance called dry leasing. Under wet leasing arrangement, the leasing company takes care of maintenance expenses. And as the lessee, you need not bear these expenses.
3. Hassle-Free Car Replacement
With a car lease or an auto lease, you can replace or upgrade your vehicles at the time of lease renewal. And when you replace and upgrade your vehicles, you provide your employees with better comfort and greater safety.
And that’s not all. Easy car replacement is also beneficial in light of the vehicle scrappage policy and the green tax.
– According to the vehicle scrappage policy (2021), all commercial and private vehicles that have been used for 15 years or more must go through a mandatory fitness check. If they fail the fitness check, they will be scrapped.
– If the vehicle is less than 15 years old but has been used for at least eight years, the government will charge a 10% to 25% ‘green tax’ and renew the fitness certificate.
These two policies can make vehicle ownership a hassle for companies. Either your vehicle will get scrapped, or you will have to pay the green tax. But car leasing saves you the trouble!
4. Tax Savings
Leasing a car can help you save up to 30% of your vehicle-related expenses from getting taxed. The employee using the car must show that they have been regularly using the vehicle for company-related purposes. They can enjoy tax benefits on the lease amount, fuel costs reimbursement, and the driver’s salary.
5. Simpler Approval Than Auto Loans
Car loan approvals can take several days. But you can get your car lease approved within 24 hours – all without the need for cumbersome paperwork!
6. Insurance Coverage
When you lease a car, the installments you pay towards the lease cover insurance charges. This insurance coverage includes repair and maintenance costs, theft, and accidents. What’s more, the lessee does not need to worry about insurance renewal.
Final Thoughts
Leasing a company car allows your employees to make the best use of their car without having to worry about its maintenance costs, upkeep, insurance, or resale.
Want to give your employees the benefits of company cars? Tata Capital Leasing Solutions help you with the best car leasing schemes that fit your company’s tax bracket, suit your cash flow, and are aligned with your business needs. Visit our website to learn more.
For further information and assistance about our leasing products, drop a mail to get in touch with Leasing experts at Tata Capital to leasing@tatacapital.com and our experts will get back to you.
FAQs
A corporate car lease program allows companies to provide vehicles for their employees. It includes flexible leasing options that enhance employee benefits and support business mobility needs.
It’s a benefit that enables employees to lease a vehicle through their employer. The monthly lease payments are deducted from their pre-tax salary, resulting in tax savings and an increase in their take-home pay.
GST is applicable on car lease payments. The rate typically depends on the vehicle type and lease structure, impacting overall leasing costs.
02 December 2024
4 mins read
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