Buy or lease a car?

What is smarter for the entrepreneur

If you need a car or company vehicle for your company, you will wonder what is cheaper and more convenient: buying or leasing a car. Both purchasing and leasing have their pros and cons. When leasing, you must pay close attention to exactly what form of leasing it concerns. Only with financial leasing are you 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 equip it with a towbar, lettering, commercial vehicle furnishings or a luxury sound system, it is your car so you can decide what to do with it. But you must pay the entire purchase amount at once. This obviously has consequences for the liquidity of your company. You also cannot write off the purchase in one financial year, which is not always favorable. You also have to take maintenance and usage costs into account. Of course, just being able to buy and pay for a car or company car has the advantage that you are not tied to anything else.

Leasing a car: advantages and disadvantages

In order to make a good comparison, it is important to know the difference between the most common types 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 financial leasing . The car immediately becomes your economic property. You can simply provide it with lettering, have a special commercial vehicle interior built into it and do everything you would do with your own car. As an entrepreneur, you also enjoy the same tax benefits as if you were to buy the car straight away. The interest you pay in the case of financial leasing can be included as a cost item and can therefore also be used as a deduction. 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. Naturally, with a financial lease you enter into an agreement that you are committed to for a number of years. Fortunately, in many cases you can pay them sooner if you wish.

Buying or leasing a car for business?

When comparing buying a car and financial leasing, we see that in both cases you are responsible for the costs of use (fuel, parking fees, fines, car wash), car tax, insurance and maintenance. In both cases you can claim these costs as a deductible item. You can also reclaim the VAT paid. If you were to buy a car as an entrepreneur, you would 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 then pay it in installments, so that the payment is more or less synchronized with the tax depreciation period of 5 years. This way you still have enough money on hand to make other investments, for example in business assets. Entrepreneurs can also deduct the interest on financial leasing from tax , so that the final costs can be much lower. Anyone who buys a car and pays for it in one go has no obligation other than the costs of maintenance and use. With financial leasing, the vehicle is collateral for the duration of the contract and you have the obligation to pay the monthly installments and any final installment.

At we are happy to help you get started! View our lease offer for the desired passenger car or company car.