Should Mumpreneurs Lease Cars for Their Businesses?

*Collaborative Post

There’s a lot of discussion at the moment about whether small business owners should buy dedicated company cars outright or lease them. Mumpreneurs, or mothers who are simultaneously juggling the demanding roles of motherhood and entrepreneurship, could stand to gain a lot from leasing cars for their businesses – but certain circumstances may make purchase (or even using the family car for business) a better option. If you’re considering leasing or buying a car for your own small business, here’s a quick guide to the pros and cons of leasing company vehicles:

Leasing a Business Car: A Viable Option

Mumpreneurs need reliable transportation to meet clients, distribute goods or services, and conduct other business activities – and they often need to keep those activities separate from family transport (nobody wants kiddie seats in their company car!). Leasing a business car lets you get a dedicated car for your business without the significant upfront costs associated with outright purchasing a new vehicle. However, the trade-off is less control over the vehicle, potential extra costs for damage outside the contract’s remit, and additional rules for transporting pets or minors.

The Advantage of Flexibility

Car leasing offers a degree of flexibility that is especially well-suited to mumpreneurs who value adaptability. It allows them to access modern, more updated cars more frequently than if they owned a vehicle. Lease contracts typically last between 2 and 4 years, enabling a company to upgrade its vehicles more often and stay at the vanguard of fuel efficiency and technology.

In addition, car leasing companies offer a wide range of models. Mumpreneurs can choose a car that perfectly matches their personal and business needs, which might not be possible when buying a new car outright due to the high initial capital required. 

Maintenance and Upkeep

Depending on the leasing agreement, some leasing companies will take care of the car’s maintenance, saving on service and repair costs. Also, monthly lease repayments are consistent and predictable, making budget planning easier. 

Leasing can also have tax benefits. Depending on the car’s emission levels and vehicle lease price, lessees can typically claim between 50% to 100% of the VAT on lease rentals, offering significant benefits for VAT-registered businesses. 

Potential Downsides

Despite all the advantages, leasing rather than buying a car is not without certain drawbacks. Leased cars have mileage restrictions. Exceeding these limits incurs additional costs. Therefore, if business activities demand extensive travel, leasing a car might not be the best option. 

Lease agreements also come with “wear and tear” clauses. If the car suffers damage beyond normal wear and tear, the mumpreneur must pay extra costs at the end of the lease. What’s more, despite paying regularly for the vehicle, the lessee does not own the car at the end of the leasing period. 

The Verdict 

For numerous mumpreneurs, leasing a car for their business can be a very good choice. Its advantages, such as flexibility, lower upfront cost, predictability in payments, and tax benefits, generally outweigh the potential downsides. However, individual business circumstances and financial constraints also play substantial roles in this decision.

*This is a collaborative post. For further information please refer to my disclosure page.