In the current economic climate leasing cars is the way to go.

The country’s banking system is in complete and utter turmoil right now. For the last few years the economy has grown on credit that banks just didn’t have and now it is all coming tumbling down.

The banks, once the pillars in our financial world and household names are now bringing it all down with them. One of the main problems businesses are having right now is securing credit to cover day to day running costs. To have the cash flow in the accounts is important for surviving and paying important bills and with no credit facilities available businesses become choked.

The down turn in the economy has recently affected the motor industry with a fall in sales reported of around 5%. This downturn has had knock on effects for companies like Seat in Spain and a Ford in the UK, who have recently scaled down production at some of their plants.

America has struggled too with the gas guzzling vehicles they drive their falling from favour due to high oil prices. It was rumoured some time ago that one of the Big Three might collapse with signs coming from Chrysler selling off Hummer.

There is a way, however, to beat the credit crunch when purchasing cars in this current climate. Companies, in particular, will benefit who are struggling to raise working capital to fund day to day costs.

The answer: Leasing.

Using this method a company can spread the cost of a company car over the designated period and not have money tied up in assets which will depreciate rapidly. It also eliminates the need to fork out a large amount of cash in the first instance and spread the payments out.

Many fleet managers are now turning to the idea in this current economic crisis as a way of balancing out their cash-flow. In addition to these reasons newer cars are not only now more efficient so will reduce the company’s carbon emissions but they are also much safer. If a staff member is involved in a car accident they will be much safer in a newer vehicle.

These reasons also apply to the average customer buying for personal reasons. The car you want may require a loan or the cash upfront.

So in conclusion leasing is currently becoming the more popular than buying outright as the principle suits the current financial market. Despite all the doom and gloom about people not buying cars some people seem to be doing OK. The new Ferrari California is a complete sell-out so someone’s still buying.