For the sake of convenience, a financial lease is sometimes referred to as a business car lease and is a lease form that is suitable for entrepreneurs. The big advantage of a financial lease is that you immediately have access to a new lease car or occasion, while it is not necessary to use your own working capital for this. You determine the duration yourself (up to a maximum). This can be fully tailored to the depreciation of the car. You pay a fixed lease amount every month. This is possible because the interest is always fixed in advance and is unchangeable. You also pay a fixed part of the monthly repayment. All this together means for you as a freelancer or SME that you know in advance when the lease expires. Financial lease is therefore one of the most transparent and clear financing available.
Financial lease is suitable for almost all entrepreneurs
Every entrepreneur, self-employed person or SME, knows that owning a good car is more necessary than a luxury. This while a new car is not always financed with own resources. It is often unwise to finance a new car yourself. By using a financial lease, you simply maintain liquidity and you already lease a new or used (company) car at low monthly charges. You pay the car back in fixed monthly installments and at the end of the journey the car is 100% your property!
Not every entrepreneur is aware that financing a car through a financial lease can yield tax benefits. People are directly the economic owner of the car and can therefore benefit from tax schemes such as investment allowance. The VAT is also deductible from the tax as well as part of the depreciation costs. You can activate the car on the company balance sheet. You do not put the credit facility at risk with this investment, since the car itself always remains the lessor’s collateral. Incidentally, as an entrepreneur you can lease the object up to the purchase price, this is excluding the VAT. You can reclaim this VAT directly from the tax authorities. Make the lease installments much lower by including a final installment in the agreement. Final terms are always maximized. You therefore always pay most of the repayment during the term. With a financial lease, everyone is the owner of the car from the moment the first lease term is met.