Car Finance for Your Business

 

Companies the world over are often faced with the costly requirement for staff cars. However, with the number of financing options on the rise, many business owners are turning to funding these purchases rather than paying cash. Additionally, with the right advice, buying a car under business finance may pay off at tax time.

Financing, rather than buying outright, enables companies to take advantage of two main benefits: greater control of cash flow and working capital, as well as various tax benefits.
“The preservation of working capital is a key benefit for business owners when comparing financing against paying cash for staff vehicles,” says Cristian Fedrigo, National Sales Manager, Leasing, and Personal Loans at AFG.

“A business owner needs to consider whether their working capital is better spent on other aspects of the business, such as paying debtors, advertising or even purchasing more inventory.”

“Some businesses may even be able to invest working capital and achieve a rate of return that exceeds the interest charges associated with financing,” added Fedrigo.
Converting a new car into tax credits is another key reason why businesses are turning to financing options. Of course, there are many different types of finance, each offering different tax benefits, as well as the luxury tax threshold to consider, so expert tax advice is strongly recommended.

“In certain circumstances, the financing of business assets provides a business owner with an opportunity to claim various tax deductions, such as rental payments, interest payments, and depreciation, thus minimising the amount of tax payable,” says Fedrigo.
Going down the financing route can be cost-effective, and with expert advice, it can also be pain-free when it comes to paperwork. Fedrigo says that some businesses can arrange finance for a vehicle without the need for financial statements.

When considering business car finance, there are various options available, to accommodate what is suitable for your business. If you want to know more, get in touch with us. We’re here to help provide you with the right answer. We also work with your accountant to save you time and make the whole process easier and less stressful.