You or your employee would enjoy the benefits of a new car. Your employee can own the vehicle at the end of the lease period by paying the Market Value which will be determined by the bid process conducted at the end. You and your employee also have the benefit of choice i.e. as technology advances you have the option to switch to a newer vehicle at the end or middle (if contracted for) of the tenure. You have the benefit of flexibility as every service offered by JMD is optional. You can pick and choose the service you want to avail from JMD including repair and maintenance.
The asset would not be capitalized on the balance sheet which will help improve Return of Assets (ROA) and Return on Capital Employed (ROCE)
You can claim the entire lease rental as an operating expense in the Profit & Loss Account thereby enjoying a higher Tax benefit. The payment made towards the lease is out of the employee's pre-tax salary which in turn increases the take home salary as the entire EMI paid towards the car provides tax reduction.
Helps keep your cash flow in check as you avoid paying hefty up-front charges. Vehicle purchases are recorded as debt and reduce available cash, leases are treated as operating expenses and hence your protect balance sheet. Under leasing the resale value of the car is calculated at the beginning and deducted from the cost of the car. Hence the EMI is then calculated on the net cost which will bring down the monthly cash outflow considerably.