RENT A CAR - Financing the business: right information, right investment. RENT A CAR - Financing the business: right information, right investment.



Renting a car is a way to facilitate both business and touristic trips. Sometimes you can rent a car in a country you are visiting, and sometimes you may prefer to rent a car for your corporate needs such as events or organizations. The advantage of renting a car in all aspects was felt much more especially during the pandemic period. Hygienic, safe and comfortable car rental options took the lead in travel processes. It would not be wrong to say that this need for car rental will increase in the coming days.

So, how does the situation look when car rental transactions are looked at by the companies? Renting a car by companies in the short or long term provides more advantages than buying a car, especially in long-term rentals, when evaluated in all aspects. Small or large businesses constantly need different types of vehicles according to their intended use. Leasing instead of financing too many vehicles at the same time makes a positive contribution to the company's budget.

 Although owning a car is prestigious for the company, renting a car has more advantages. Renting a car offers companies more options in terms of comfort, fuel consumption and purchasing top model vehicles. In addition, they do not have to deal with issues such as vehicle insurance, maintenance, taxes, insurance. In case of emergency, they receive fast support on issues such as new vehicles and roadside assistance. For this or similar important issues, you can also take a look at our content on What Should You Pay Attention to While Renting a Car.

advantage car rental

Long-term car rental is called fleet rental. Companies gain advantages in many areas with fleet leasing management. We can list the 5 advantages of corporate car rental for companies now and later, as follows;


What Advantages Does Car Rental Have in Terms of Finance?

Loans from some banks can be used to purchase a vehicle, but a certain percentage of the vehicle cost must still be paid in advance. There is no upfront payment in the rental option. With the down payment to buy the vehicle, the company can finance other needs. Monthly or annual payments can be made for car rentals. From this point of view, it can be said that renting a car provides companies with a financial advantage. Car rental is carried out at economical prices. Unlike short-term rental, long-term car rental has more advantages. If we talk about another financial advantage of renting a car;

  1. The longer you need the vehicle, the longer you rent it.
  2. When you lease a fleet, this company is not among your assets.
  3. You pay rent with fixed monthly fees, and there will be no lump-sum payment required when purchasing a vehicle. Thus, your budget will not be shaken.
  4. The payments you make for car rental will not affect your credit limit at banks. The future rental costs of the vehicles do not appear in your financial debts and thus your balance sheet looks strong.


What are the Tax Advantages of Car Rental for Companies?

Companies have the advantages of renting a vehicle by renting a fleet instead of buying a vehicle. These advantages allow companies to rent vehicles in any number and in different models, depending on their needs. If we talk about the convenience of fleet leasing in paying taxes for such needs;

Provides convenience in vehicle renewal:  When companies want to renew their vehicles, they can sell the vehicles they have purchased according to their second-hand price. This means paying taxes on the difference between the book and sales value. Companies are freed from the risk of decreasing the value of the vehicles to be sold by leasing a fleet and from the obligation to pay taxes in case of sale. There is no taxation in fleet leasing. You can change the vehicle you have rented at any time. You can switch to lower or higher models, change your fuel preference, automatic or manual vehicle preference at any time.

VAT discount is used: In the case of fleet rental, the VAT on the rental invoice is calculated as the VAT to be deducted. Rental invoices are shown as 'expenses' in accounting and companies benefit from VAT reduction with fleet rental.

Motor Vehicles Tax: Motor Vehicles Tax is included in the rental price when renting a fleet. Thus, the Motor Vehicle Tax fee is also shown as an expense, which means that the company is deducted from its tax.

Vehicle Maintenance Payments: As with VAT, vehicle inspection, vehicle banderol and similar tax-based payments are shown as expenses in the case of fleet rental and mean that the company is deducted from tax.

Advantages of Car Rental in Insurance and Other Operational Businesses

In case of car rental, the compulsory traffic insurance of the vehicle and all other insurances belong to the rental company. In case of an accident with the vehicle, you will receive a replacement vehicle until your vehicle is repaired, and in this process, you will not be left without a vehicle and your work will not be interrupted. Car rental companies even organize summer / winter tire changes.

Advantages of Renting a Car for Maintenance Processes

In order for vehicles to be in traffic, they need to be maintained and inspected at regular intervals. The car rental company takes care of these maintenance processes and provides you with a replacement vehicle in this process. For the inspection procedures, the income vehicle takes delivery from you, leaves you a replacement vehicle, and when the vehicle inspection procedures are completed, it returns your original vehicle to you and delivers it.

When you rent a car for your company, you do not need to spend time on issues such as buying and selling vehicles, tax periods, maintenance times, insurance. The rental company takes care of all these paperwork and operational situations.

In summary, it is more advantageous to rent a car for your company than to buy a car for both tax and financial advantages, time savings and operational works.

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