Credit or leasing for a car? – Advantages and disadvantages of these solutions

Entrepreneurs planning to use a new car face an important choice, which is most often limited to two options – car leasing and car loan. Which solution is better and more convenient? Or are they comparable?

Car leasing has many benefits. This solution appealed to entrepreneurs, among others due to the possible tax solutions. When leasing a car, an entrepreneur running a sole proprietorship may include in the tax-deductible expenses incurred for the operation and monthly fees for this car.

Car leasing – pros and cons

Car leasing - pros and cons

It is also worth mentioning that the so-called offers are becoming more and more popular nowadays. consumer leasing, i.e. the same solution, however, intended for people who do not run a business. The list of various types of market offers can be found on the calculator website, thanks to which the selection of the best offer will be much easier.

Car leasing is a great solution for drivers who are not attached to the car for a long time and after some time want to replace the car with a newer model. By entering into a leasing contract, you are declared to use a specific car for a specific period of time in exchange for a monthly fee.

The very structure of the contract is legally similar to a property lease. So while when selling a previously purchased car, naturally you lose a few, a dozen or even several dozen percents of its initial value, in leasing the car is simply handed over, and with the conclusion of a new contract “exchanged” for a new model.

Own a car, i.e. financing with a loan

Own a car, i.e. financing with a loan

Car loans belong to the so-called specific loans and often have a relatively attractive interest rate. Thanks to this, buying a car financed by credit seems to be an interesting alternative to leasing. People running a business also need to consider this solution because, like in the case of leasing, there are opportunities related to tax optimization in this field.

If the business actually requires the use of a car, then not only operating costs (including fuel), but also loan interest can be booked as tax-deductible costs. The cost of buying a car itself can be reduced by the value of VAT if the entrepreneur is a registered VAT payer.

The most important advantage of buying a car through credit compared to leasing is that the car actually belongs to the buyer. This means that you can do anything with it. Both minor modifications and even dream tuning are activities that are allowed in this case and which would be prohibited by any traditional car leasing contract.