At present cars are treated as one part of engaging in businesses, for the sake of convenience in financial administration, human resources administration, and budget controlling, hiring cars for long term instead of buying cars will assist your business administration get more benefit such as sample of comparing between cars hiring and buying cars
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1. Vehicle available at all time, Free immediate replacement for equal or better model of vehicle involved in the accident,
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1. Replacement on buyer’s or operator’s own expense and responsibility,
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2. rental charges fully recognized as coompany’s expenses for tax purpose,
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2. Only depreciation of not more than 20% of the original value of the Bht. 200,000.- per 1 year, whichever is greater can be recorded as expenses,
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3. No out-of-pocket maintenance expenses;
Engine replacement
Re-paint
Vehicle replacement
Other maintenance expenses,
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3. Maintenance on buyer’s accounts. Some expenses are classified as Capital Expenditure, according to the Revenue Department and cannot be used or recognized as expenses in Net Profit calculation
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4. Driver available at all time. Worker’s / driver’s relation will not be an issue to the Lessor, |
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4. Driver / Worker’s relation including Fringe Benefits, Retirement Plan, Medical Expenses and personnel management become the buyer’s responsibility,
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5. Drivers and vehicle management is the Lessor’s responsibility. This is transparent to the Lessee, |
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5. Require additional personnel to account for the vehicle, vehicle maintenance and insurance,
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6. Fix monthly charges eliminate the need for maintenance budget. Budget for the vehicles become more accurate, |
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6. Dynamic maintenance budget. Some maintenance is unexpected and unforeseeable,
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7. No investment in non-production asset, |
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7. Vehicles become another non-production and non-revenue producing asset of the company, which involves extra budgeting or additional loan from the bank,
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8. No additional liability on the financial statement, |
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8. Create another liability to the company,
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9. Lower dept. Equity Ratio. This help strength the company’s financial position.
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9. Higher Debt. Equity Ratio. This will affect the company’s financial position. |
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You can choose those of various car models, brand names and all of the cars are brand-new as your company budget
