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| Business Car Lease | |||
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The term business car lease, sometimes called a "commercial vehicle lease," refers to the concept of leasing motor vehicles for use in a business, for business purposes. Generally, a business car lease provides a more convenient and less expensive alternative to the cash purchase option. It allows for better use of a business' cash resources and offers potentially significant tax advantages at the same time. Generally, all expenses associated with a lease can be deducted, including up-front costs, monthly payments, insurance, maintenance, and repairs. Many business leases are "open end" leases in which the residual is set low, which creates higher monthly payments, but greater tax benefits. The lessee is responsible for any differences in residual value and lease-end market value. This risk is minimized by the previously mentioned low residual. Because every business is unique and tax situations vary, it is suggested that any such lease be done only with the advice of appropriate accounting and tax counsel. Be aware that if a vehicle is used for both business and personal purposes, tax benefits only apply to expenses related to business use. This requires careful and detailed documentation. For more information, the web site for Alpha Auto Leasing contains some helpful information regarding business leasing.
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