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New start-ups face an endless march of decisions, issues and challenges to act upon, and what to do about vehicles is just another one of those moments. In this article we look at a question facing many owners of startups – what are the pros and cons of buying and leasing a business vehicle?

What is a lease?

A lease is essentially a long-term rental. You pay a reduced cost for the vehicle, but you never own it. This comes with its own advantages and disadvantages. There are some questions you should ask yourself before committing.

How much cash do you have to spend?

Buying a vehicle usually requires a down-payment, whereas leasing one usually doesn´t. As always, you will need to shop around. The key question is: how much cash you want to invest in a purchase versus how badly you need the vehicle. That´s a question only you can answer.

How much will you use the vehicle?

Lease agreements may have a mileage limit, which may need to be negotiated if you are going to drive a lot. On the other hand, a private vehicle will depreciate faster and need more maintenance if it is driven more.

Speaking of maintenance… who will pay for that?

If it´s a private car, the company is liable. The lease agreement will state if maintenance is included in the cost.

Who will drive the car?

This comes down to control. If it´s not you driving, do you have the time to check the mileage on a lease vehicle every time your employee returns it?

What do you want to do with the vehicle long term?

Is it an asset or a short-term need? Are you going to trade it in, or, if it´s a lease, just return it and negotiate for a new one?

What about taxes?

This is complex, so check with your tax advisor. Cars must be used 50% for business needs to be tax deductible, and lease payments are usually deductible, whereas only the interest on a loan is deductible.

To conclude:

There are many options and you need to do the research and make the choice based on your reality. Some leasing companies, such as Mayday Vehicle Rentals offer flexible contracts where vehicles can be rented short-term and this can be a great half-way house until the situation becomes clearly.

Good luck!

Debt seems to be a factor of life, but it does not have to be. People throughout the country are working toward their reduced debt and even debt free goals every day. You do not have to have a bottomless bank account to get out of debt. You just have to know how to do it. Here are 5 ways you can reduce or even eliminate debt in 2017.

Prioritize

The reason that so many people are drowning in debt these days is that they do not understand a strategy to reduce the overall debt. The key is to prioritize your personal debt. This can be done in a number of ways, but the most effective is to hone in on the smallest bill per month. Pay extra toward it until that one bill has been eliminated. Once it is gone, instead of spending the extra money each month, put it toward the next smallest bill along with the extra you were already paying. Soon you will notice that your debt will begin to vanish rapidly.

Look at Interest Rates

People often pay attention to the main bill, but rarely the amount of interest they are paying each month. The numbers can be astonishing, but sometimes a little revamp of your personal finances is in order. Some credit card debt can be eliminated by getting a small business loan as many small business loan rates are much lower than the standard credit card rates.

Talk to Creditors

It is common to believe that the creditors are out for blood especially when they call every day. Instead of avoiding the call, talk to them and see if there are other options that can either lower your interest rates or reduce your monthly bill. The creditors want to work with you, but you have to talk to them first.

Forgiveness Programs

Student loans can be quite difficult to pay off and the interest rates are forever rising. Government programs however are now in place that allow you to reduce your debt and some will even forgive the loan. Search into forgiveness programs for student loan debt and find the one that is right for your situation.

Track Your Expenses

There are needed expenses each month, but sometimes certain purchases are simply unnecessary. If you are among the many who frequent the local coffee shops, tally up what you spend each week on your coffee. That number will likely shock you. Invest a little money in a coffee maker. You will save mountains of cash over the year and instead of spending it, pay extra on monthly expenses. Coffee is not the only item you likely do not really need each month, but it is a great start. Once your debt is paid off or down, you can bring those items back into the picture.

Debt might seem like it is a part of life, but with some smart, budget minded thinking, you will see that the debt that seems to have a hold on you, is something that can easily be eliminated.