Company car: leasing or financing?
From the optimization of the profit and loss account.
The financing of a company car can have a major impact on the liquidity and the profit and loss account of a company. The decisive factor is how a company finances. For a purchase or. With financing the car is purchased and becomes the property of the buyer. With leasing, you rent the car for a fixed period of time and can buy it at the end of this period minus the leasing payments already made, but you don’t have to. Which variant is the better one for a company?? In this article, we present the most important points and, above all, the tax aspects of a residual value lease company car financing and a company car leasing compared to.
Leasing of company vehicles
many entrepreneurs favor the leasing model in order to preserve the company’s liquidity. Companies can also deduct the leasing rate as a monthly operating expense for tax purposes.
Only in the case of a possible special leasing payment at the beginning of the lease, there can be an exception. Monthly payments are also usually relatively low with leasing.
The leased vehicle can also become the company’s own property after a certain period of time, but this is not mandatory. This depends on the terms of the contract, which must always be carefully examined. Contractual terms for leasing are usually between two and four years, and companies cannot usually terminate the contracts prematurely. In general, the leasing of a company car is divided into the following categories mileage leasing and residual value leasing differentiation. Before signing the contract, you should compare which is best for you and your company to avoid any unexpected bills.
In the case of mileage leasing, an upper limit is set for the number of kilometers driven. At the end of the term, the number of kilometers the vehicle has actually been driven is checked. If the amount paid falls below this upper limit, the lessor will usually refund the money. In the event of an overrun, a subsequent payment is often very expensive; according to the ADAC, the average contribution is 10-15 cents per kilometer.
Caution is advisable here: special attention should be paid when determining the contract, so that no unexpected costs arise at the end of the contract term.
Residual value leasing
In contrast to an upper limit of kilometers driven in the kilometer contract, a residual value contract specifies a certain residual value at the end of the leasing period. This serves as the basis for calculating the leasing rate. When the vehicle is returned, an appraisal is carried out by a surveyor. There are two different cases that can occur:
if the determined value is higher than initially agreed, a refund is made (i.D.R. 75 % of the amount that the vehicle exceeds the contractually agreed residual value, the remaining 25 % goes to the leasing company).
If the determined value is lower than initially agreed, the lessee must make an additional payment in the amount of the difference. This subsequent payment is referred to as residual value risk.
mileage leasing or residual value leasing?
Residual value leasing is generally much riskier than mileage leasing, as the customer is responsible for the proceeds from the sale of the vehicle at the end of the contract. the price of the vehicle depends on the used car market. If the residual value drops due to external factors, the lessee has no influence on what value is determined at the end of the contract period. Residual values can often be determined incorrectly.
In the case of residual value leasing, special care is also required when handling the vehicle; regular visits to the workshop are recommended. Minor defects or damage can also have a significant impact on the valuation of the vehicle.
However, since there is an increased risk with residual value leasing, the monthly installments are correspondingly lower than with mileage leasing. If the residual value at the end of the term is very high, this can be advantageous, but one should be aware that the risk cannot be influenced. Mileage leasing is therefore easier to calculate and unforeseeable events can be avoided.
Important: when considering leasing or financing the company car, you should always first check the price difference between a purchase and a leasing agreement. After that, various offers should be compared in terms of the monthly leasing rate and the term of the leasing contract.