Costly Business Car Leasing Mistakes to Avoid & How to Avoid Them

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When you lease cars for business, there are a lot of things that can go wrong. Here, the stakes are higher. You can lose a lot of dough if your fleet of vehicles isn’t up to par. Having new cars on hand is very important for your brand’s image, which is why a lot of companies lease over buying. Read the following tips to make sure you not only get the best deal when you get a new leased vehicle, but also when you drop it back off at the dealership at the end of the lease period!

GAP Insurance Protection for Business Leasing

You want gap insurance for your corporate fleet. This is a special type of insurance that will cover your investment into a leased vehicle. If your leased vehicle is totaled, the insurance company may write your car off as less than the full value of what the leasing company determines you owe to them for the early termination of your lease. Gap insurance covers this and makes sure that you come out even and on top. It’s great because the market value of a vehicle lessens with time and as more time goes by you run the risk of not getting the full value of your vehicle!

Choose the Right Annual Mileage for Your Business Lease

When you lease a car you have to pay based on how much you think you will drive the car. If you drive more than that, at the end of the lease you will have to pay more than you’ve already paid. This can be a huge business expense if you’ve got several cars in your fleet. Most lease cap mileage anywhere from 12,000-15,000 miles per year. The fees for going over could be as much as 25 cents per mile which is a lot depending on how many miles over you go! However, high mileage and even unlimited mileage leases are available so make sure you ask your leasing agent about that.

Leasing a Business Fleet of Vehicles for Longer Periods

This is a mistake even though it doesn’t really seem like one. The main reason why leasing a car for 4 or 5 years is a mistake is that you may lease it for longer than the warranty period. In that case, you will not be covered for repairs and you will have to pay out of pocket to fix a car that you don’t even own. This includes the regular maintenance that happens on cars like oil changes and tire rotation. Longer-term leases can be less expensive in the short term, but when you take these other factors into consideration it’s just not a good idea.

Excessive Wear and Tear on Fleet Leases

When leasing a vehicle, you have to return it in relatively the same condition that you received it. If you don’t, you could have to pay more than what you thought. Make sure that you perform regular maintenance on the vehicle and you get any cosmetic damage repaired quickly. Before you return the car to the dealership you will want to get the car cleaned to show that you’ve been taking good care of the vehicle the whole time. Get it cleaned both inside and outside to return it in pristine condition.

The Small Print on a Fleet Lease Contract

Read everything on your leasing contract before you sign that dotted line. Sure, you may think that everything is on the up and up and that there is nothing in there that could come back to bite you later, but you have to make sure. Read everything if you don’t want to get charged for surprise things. Be wary of companies whose leasing agents encourage you not to read the fine print or don’t help to explain terms of things to you.

Early Termination Charges on a Business Lease Contract

The contract for leasing is legally binding so you are in it for the duration of the lease. If you need to get out of it sooner then you will have to pay a substantial fee. Consider that this fee is basically exponentially doubled when you have a whole fleet of leased vehicles. Make sure that the terms of the contract are going to work for you and don’t go into it thinking that it will be easy to get out of!

Creating a Contingency Plan to Continue Business Leasing

When you have a two-year lease, as a business owner, you need to start thinking about what you’ll do at the end of the lease by the time you’ve got that new fleet in the door. The basic point is, always know what your plan is going to be. Will you buy the vehicles at the end of the lease or trade them in for this year’s model? Either way some financial preparation is going to be necessary to make the change.

Make sure that you have all the information before signing a lease for your business fleet of vehicles and have a great time with your new vehicles!