Why should you consider leasing your next business vehicle?
An Open End or Terminal Rental Adjustment Clause (TRAC) lease provides the greatest flexibility. With this type of lease your payments are usually lower than conventional financing and they have no mileage or wear and tear provisions.
Commercial Leasing provides many financial, accounting and productivity benefits.
Some of those are:
A TRAC lease expense may be designated as operating leases under FASB 13 and can be foot-noted as off-balance sheet items. This may enable you to improve ROA, avoid leverage restrictions and potentially improve reported earnings.
- Preserve working capital and liquidity for other corporate capital expenditures[/*:m:49522]
- Off-balance sheet accounting[/*:m:49522]
- No down payment[/*:m:49522]
- Lower payment than conventional financing [/*:m:49522]
- Potentially reduce taxes. Leasing is recognized as a tax-deductible expense by state and federal agencies and is not an "add back item" in calculating AMT. In addition, leasing provides sales tax exemption on acquisition price of the vehicle in most states. (Rental tax is collected on the monthly lease payment.) [/*:m:49522]
- Shorter lease terms mean you can replace vehicles more often and avoid maintenance costs. [/*:m:49522]
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