Maximizing Time and Money: Car Leasing for Mom Entrepreneurs
Whether you’re an established mom entrepreneur or have just turned your hobby into a new business, a business vehicle can give you the flexibility, freedom, and opportunity to take your venture to newer heights.
But before you jump into leasing a car for your business, there are some important things to keep in mind.
In this guide, we’ve discussed what car leasing is and why it’s beneficial for mom entrepreneurs. We’ve also included helpful tips on maximizing time and money during the leasing process, and a discussion on car leasing vs hire purchasing (you can read more about that in Westpac’s car lease vs hire purchase article).
Let’s begin!
What Is Car Leasing?
Business car leasing is a useful way for your business to access a car without having to legally own it. This type of car finance allows you to lease a vehicle of your choice for a number of months, and then eventually return it to the finance company.
The cost of leasing a business car is split into two parts — an initial upfront payment (like a deposit which is non-refundable), and monthly installment payments.
At the end of your contract, you return the car to the leasing company, where it’s inspected for damage and mileage and then the lease expires. Depending on your needs, you’re then free to renew your contract or lease another brand new car for your business.
Benefits of Car Leasing for Mom Entrepreneurs
From the ability to switch vehicles to flexible packages and attractive monthly costs, there are many different reasons why car leasing is advantageous for your business.
Leasing can be the most cost-efficient option if you just want to use a business car for a short amount of time, and if buying a vehicle isn’t a viable financial option. Here are some key benefits that car leasing brings for mom entrepreneurs:
- You will not be responsible for maintenance of the vehicle since you don’t actually own it. This allows you to save money on these expenses, and perhaps invest it in improving your business.
- Once your lease term reaches an end, you can easily upgrade your vehicle if you wish to. If you’re a growing business, this is an advantageous option, as it gives you greater flexibility over the type of vehicle you choose.
For instance, if your business grows such that you require a large truck over a regular car, you can upgrade to a truck as soon as your current contract expires.
- A lease agreement is generally affordable, as you won’t need to make a hefty initial deposit.
- Lease agreements are not a permanent commitment. Due to their more temporary nature, you can use the contract as a trial run to determine whether investing in a business vehicle is worth it.
How to Save Money When Leasing a Car
Of course, you want car leasing to be as affordable as possible. So here are some ways to save money when leasing a car for your business.
- Consider no deposit lease deals or a deal with a very small deposit. By choosing the smallest initial rental, you won’t have to make a bulk payment straight away.
- Add a maintenance package to your lease to include maintenance costs in your monthly payments. This can save money in the long run when annual service of MOT rolls around.
- Make an accurate representation of the miles you expect to drive instead of underestimating them. If you don’t allow for enough miles in the contract, you may face hefty mileage penalties at the end of your contract.
- Conduct careful vehicle research and search by budget. If you have a vehicle in mind, compare its features with other models in your price range to check if you can save money by choosing a different manufacturer.
How to Save Time When Leasing a Car
Leasing a business car can be a lengthy and exhausting process. And you not only want to save money during it, but you also want to minimize the time you spend on it.
After all, time is money, especially for mom entrepreneurs like you. So here are three tips on how to save time when leasing.
- Make a list of must-have features, functions, and qualities you need in your vehicle. This will give you some direction so you don’t end up exploring options you would never actually buy.
- Conduct online vehicle research before visiting dealerships. The internet can make you a car expert in no time, so you can’t be overcharged for a vehicle.
- Weigh in your business’ performance and have a clear budget in mind. Once you share this with the dealer, they will only show you deals you actually qualify for and not waste your time exploring packages your business cannot afford.
Hire Purchase: An Alternative to Leasing
If you’re looking to buy a car for your small business but don’t wish to lease it, you can look into a hire purchase agreement.
Hire purchase is similar to leasing. It’s where you pay off the cost of your car in weekly or monthly installments for a fixed repayment period. At the end of this period, you will gain full ownership of the car.
This is a great option to consider if you wish to eventually purchase a business vehicle, but do not have the capital to do so immediately.
There are several important ways a hire purchase differs from leasing. These include:
- Ownership: You have the option to purchase the car at the end of a hire purchase agreement. This option is not available when you lease a vehicle.
- Vehicle maintenance: Unlike leasing, you will be responsible for car maintenance if you finance your car through a hire purchase agreement.
- Duration: Hire purchase agreements are usually shorter than lease terms. This might mean greater monthly payments, but it also means you’ll be able to purchase or upgrade your vehicle quicker.
- Depreciation: You can claim car value depreciation if you’re using it as part of a hire purchase agreement. This option is not available with leasing.
Final Words
We hope that this article was useful in helping you make a better decision when it comes to leasing or hiring purchase of a business vehicle.
Given the cost and time implications, it’s important to take your time and weigh up all the options available before you make a decision. Best of luck!