The benefits of operating leasing - Find out what they are! The right solution for entrepreneurs

If you have or want to start a business in a field that involves the use of cars, you have probably evaluated the solutions you have to meet this need and you have come across the following question: what is more profitable - to take ownership or rent?Generally, the preferred solution for entrepreneurs is operational leasing, because the advantages of such a contract includes the diminish of administrative tasks for the economic operator.Thus, to ensure that this option is the right one for your business, read below the advantages of operational leasing.Table of Contents

1. What is operational leasing?

Operational leasing is the contract by which a party, called the lessor-financier undertakes to transfer to the other party, called the lessee-user, the right of use over an asset whose owner is or is not, for a sum of money, called the lease or rent instalment, without the lessee having the right to opt for the purchase of the good at the end of the contractual period.

More precisely, through this service, a company makes available to you, in order to use, one or more cars, in exchange for a fixed instalment (most of the times, monthly). You will only have the right to use those cars, the property right always remaining in the patrimony of the leasing company.It is important to know that in the case of operational leasing services, at the end of the contract, the goods will be handed over to the company that owns them, without, in principle, having the option to buy them.

2.In which cases does operational leasing bring the most benefits?

Operations of this type bring the most advantages when we are in the case of an economic activity.Thus, although individuals also have access to this service, it is much more beneficial for companies, regardless of their legal form - authorized individuals, sole proprietorships, micro-enterprises, limited liability companies or joint stock companies.

3. What are the advantages of operational leasing?

Operational leasing is a solution for outsourcing car fleet responsibilities, which can be used regardless of the size or age of your business. The operation will inevitably lead to budget cuts for motor vehicles, which means that the remaining amounts can be invested in the development of the business.

3.1 Operational advantages

Car administration From purchase to scrapping, the leasing company will handle the management of the cars. Thus, the relationship with dealers, registration, overhauls and repairs, insurance, tolls, all will be in the care of the lessor-financier, your attention can be directed entirely to business.Simplifying the car fleet management activityAll you have to do is pay the monthly installments on time and notify the leasing company when a problem occurs with one of the cars.Residual value riskOperational leasing is an advantage for companies and because they do not bear the risk of residual value or the emergence of new, more efficient models. These will always remain the responsibility of the owner.

3.2 Financial and tax advantages

Minimal financial effortIt is not necessary to have extraordinary liquidity to acquire the vehicles you need. The advance payment is 0% and you will not pay for vehicle registration, environmental or tax fees, these being, most of the time, included in the monthly rent.Cost planningOperational leasing also has the advantage that you will always know what the expenses are with the car fleet, which means that there will be no unexpected costs that will ruin your budgets and their planning.Accounting simplificationThe cars will be registered in the accounting of the leasing company, which will also be the one in charge of their depreciation. In your accounting, only the expenses with the monthly instalment will be seen.DeductibilityOne of the advantages of car leasing on the company is that, in the case of companies paying corporate tax and / or VAT, the rate costs will be considered deductible expenses either 100%, when cars are used exclusively for business purposes or 50% when used for personal purposes also.Therefore, now that you know the benefits of operational leasing services, all you have to do is contact the company that handles it and enjoy the benefits of a professionally managed fleet of cars for your company.

4. Frequently asked questions and answers about operating leasing and its benefits

What are the most important advantages and disadvantages of operational leasing?The most important advantage is the minimum amount you must have to benefit from a high-performance car, but also the fact that its management will be provided by the leasing company , which means there won’t be any hassle for you. A main disadvantage is that you will only have the right to use the car, not its ownership.Is a replacement car offered when the leased one is being repaired?Depending on the terms of the contract, you may be able to receive a replacement car.Who bears the costs of repairs? In general, these costs will be borne by leasing company , which will recover them from the user. However, depending on the contractual clauses, the mechanism may be different.Photo source: storyblocks.com