Many small businesses own one or two vehicles or even an entire fleet for use in transporting goods.

They may allow employees to use a company vehicle to meet with clients or do other job-related tasks instead of using their own personal vehicles.

What many small business owners may not realize is that leasing is another option that can be beneficial in certain cases.

Facts About Commercial Leasing

Leasing a car for small business use is similar to leasing for personal use.

You still have to fill out an application and qualify for the lease terms.

These terms will be different for a business because more than one person will be driving the vehicles, they will have various uses, and you may have higher mileage than an individual.

Finance companies usually account for these differences when creating leases for commercial use. The terms may be different and fees may be higher.

These business leases are often open-ended, which means that it doesn’t have a specific price for purchase at the end of the lease term. These vehicles will have a lower value than if the car was leased for personal use.

You also want to find out about the terms when you are ready to return the car and if you have a buy-out option.

Benefits of Leasing for Business

When deciding whether to lease or purchase, the choice may vary based on your specific situation.

In many cases, you will pay a lower payment for leasing than for buying.

The amount is calculated on how much the vehicle will depreciate rather than the total cost of the vehicle. The difference is less than it would be for an individual lease, but it can still result in savings for the business.

At the end of the lease term, you can return the vehicles and lease or buy new ones.

You are not left with the responsibility of selling them. You also don’t have to worry about trade-in value for them.

Great Deal on Leasing Commercial Vehicles

The key to leasing is to know how to get a great deal.

As the article, “5 Ways to Pay Less When Leasing a Car”, says, you want to select a car that holds its value.

A car that has a higher residual value will be worth more at the end of your lease term. That translates into lower payments for your business because you will have less depreciation.

You also want to find out the details about the lease program when it comes to mileage. It can be less expensive to pay up front for extra mileage than to pay the penalties later on.

Find ways to reduce your mileage if possible to ensure you don’t end up paying out more than you should.

Leasing a vehicle instead of purchasing a company car can be a great option for many small businesses.

Find out the details and weigh your options before making a final decision.

About the Author: Joyce Morse is an author who writes on a variety of topics, including finance and running a small business.