For businesses, a convenient and efficient mode of transportation is ideal, especially if the employees are required to meet clients regularly for meetings away from the office. In such cases, a car can be extremely useful. Owning a car in Singapore, however, may not be cost-effective due to soaring Certificate of Entitlement (COE) prices and exorbitant car prices. How can businesses gain access to cars without the financial burden? In this article, we take a look at company car lease as a viable transportation option for businesses and the benefits it provides.
Purchasing a car in Singapore places a lot of strain on the business’s resources, especially if multiple vehicles are required. Depending on the size of the business and the business model, purchasing and owning a car could be a significant liability that could threaten the stability of the business’s cash flow, as well as the company’s ability to obtain business loans or other lines of credit.
Opting for a company car lease could improve the business’s overall cash flow as a long-term car lease requires only a (usually refundable) security deposit at a fraction of hefty ownership down payments when purchasing a vehicle — allowing the business to spread its costs with zero asset depreciation. The funds pumped into purchasing vehicles for the business can in turn be assigned to fund other business venture needs.
Car buyers are expected to handle all of the paperwork and costs associated with car ownership with different parties on their own. Even after the purchase is completed, there are numerous other costs and paperwork to deal with annually. This can be quite a hassle to deal with.
Depending on the business’s car leasing company of choice, one of the key benefits about car leasing in Singapore is that the business need not take care of administrative work, servicing and maintenance costs, and other car-related expenditures independently. Car leasing companies serve as a one-stop solution to help businesses manage their use of vehicles effortlessly.
Take for example, a Vehicle Entry Permit for a business trip to Malaysia or the purchasing of new vehicle insurance policies. If businesses lease a car, comprehensive insurance coverage is provided in the lease package, saving business owners valuable time from assessing and evaluating policy details.
Long term car leasing is an excellent way for businesses to optimise their operations and minimise the complexities associated with vehicle ownership. Establishing an enduring partnership with car leasing companies unlocks a plethora of conveniences that can boost operational efficiency and financial well-being.
From 24/7 roadside assistance and replacement vehicle pick-up and drop-off services to fixed monthly payments that offer precise budgeting and expenditure forecasting, car leasing companies help businesses to simplify fleet management, reduce costs, and allow them to concentrate on their core functions.
All cars depreciate in value and the worth of a vehicle will continue to decrease with each passing day. It is said that the moment one drives a new car out onto the road, it loses thousands of dollars in value.
In Singapore, the combined value of all costs involved in purchasing a car can amount to a few hundred thousand dollars due to high COE prices; the COE prices for August 2023 Cat A and Cat B vehicles alone are $99,499 and $126,889 respectively. With the hefty COE payment, downpayment and monthly bank instalment to pay, owning a car will only rack up a slew of unnecessary monthly expenses for the business. With depreciation, cars can lose between $10,000 and $12,000 in value within a year.
With car leasing, businesses do not have to worry about losses caused by fluctuating resale values when disposing vehicles, and are able to avoid all the additional charges that come with buying a car. All these costs will be absorbed by the car leasing company and businesses will only have to pay a fixed monthly fee.
Car leasing options provide companies the flexibility to increase their fleet as the business grows. With the help of the car leasing company, the process of replacing current car models with newer ones can be completed quickly and without delay. If businesses were to purchase vehicles for their use, employees will only be able to drive the same vehicle until the business decides to sell and replace them. Moreover, the entire buying and selling process takes a long time.
Signing a company car lease is a much simpler process compared to purchasing a company car. It allows businesses to easily provide optimum transportation solutions for greater convenience and cost-effectiveness in the long run. It also grants businesses a hassle-free leasing process, avoids depreciation, provides a one-stop solution for all vehicular needs, and even ensures safety on the road.
Cycle & Carriage Leasing’s corporate fleet programme offers tailor-made car leasing solutions for companies in Singapore. Our all-inclusive programme covers everything you’ll need from insurance and vehicle maintenance to fleet management services. Find out more about the corporate leasing packages offered by myCarriage!