Buy or lease a car?

What is smarter for the entrepreneur

If you need a car or company car for your company, you will ask yourself which is cheaper and more convenient: buying or leasing a car. Both buying and leasing have their pros and cons. When leasing, you have to pay close attention to which form of leasing it concerns. Only with a financial lease you are the direct economic owner of the vehicle.

Buying a car: advantages and disadvantages

When you buy a car, you immediately own it. You can do whatever you want with it. Whether you want to provide it with a towbar, lettering, commercial vehicle equipment or luxury sound system, it is your car, so you can decide for yourself what you do with it. But you do have to pay the entire purchase amount in one go. This of course has the necessary consequences for the liquidity of your company. You cannot depreciate the purchase in one financial year, which is not always favorable. You also have to take maintenance and operating costs into account. Of course, simply being able to buy and pay for a car or company car gives you the advantage that you are not tied to anything else.

Leasing a car: advantages and disadvantages

To be able to make a good comparison, it is important to know the difference between the most common forms of leasing. With operational lease and private lease you only pay a fee for the use and in principle the car does not become your property. That is why it is better to look at the advantages and disadvantages of a financial lease . The car does become your economic property immediately. You can simply provide it with lettering, have a special commercial vehicle interior built in it and everything you would do with your own car. As an entrepreneur, you also enjoy the same tax benefits as if you would buy the car right away. The interest that you pay in the case of a financial lease can be entered as a cost item and therefore also used as a deductible item. You also pay the purchase price of the car in installments so that the purchase does not have major consequences for the liquidity of your company. Of course, with a financial lease you enter into an agreement to which you are committed for a number of years. Fortunately, in many cases you can redeem them earlier, if you'd like.

Do you want to buy or lease a car for business?

When comparing buying a car and a financial lease, we see that in both cases you are responsible for the costs of use (fuel, parking fees, fines, car wash), motor vehicle tax, insurance and maintenance. You can declare these costs as a deductible item in both cases. You can also reclaim the VAT paid. If you were to buy a car as an entrepreneur, you have to pay for the purchase in one go. This reduces the liquidity of your company. As an entrepreneur, it may therefore be more beneficial to lease the car. You pay it in installments, so that the payment is more or less synchronous with the fiscal depreciation period of 5 years. That way you still have enough money on hand to make other investments in, for example, company assets. Entrepreneurs can also deduct the interest from financial leasing for tax purposes , so that the ultimate costs can be a lot lower. Anyone who buys a car and pays it in one go has no obligation, except for the costs of maintenance and use. With a financial lease, the vehicle is collateral during the term of the contract and you have the obligation to pay the monthly installments and any final installment.

At 123Lease.nl we are happy to help you on your way! View our lease offer for the desired passenger car or company car.