If you want to start a Taxi or Limousine business and not sure if you should buy or lease a Taxi or Limousine licence in Canada then here are some words of caution and information about how to go by with it and whether to own or lease a limousine or taxi business.
Leasing a Vehicle And License
- When you lease a vehicle and license, these costs can be tax deducted from the business and hence your profit will not be taxed as extensively. That means though that you are just leasing and the license and vehicle are not yours to own and the money you pay monthly to lease them is a complete waste.
- Your business value is reduced due to the fact that you have no assets and the business is based on leased equipment. If one day you decide to sell the business, its value is less than if you had real assets. The owner of Limousine Montreal Limos VIP explained the concept to me and i was surprised with what he told me.
- The fee for renting the license of the taxi or limo may increase at any time and there is nothing you can do about it. You are only leasing and have to abide by their terms.
- Leasing means you can start your taxi and/or limousine business with very little capital and provides opportunities for anyone to be in the industry. It’s a good way to start in the business to know if you will make it or not, instead of investing a large amount of money and not seeing returns for many months to come.
- Leasing a vehicle could be better than owning cause you can keep updating your inventory for years to come and will have the latest and greatest models of cars. You will need less maintenance costs and your customers will be more impressed because of the age of your taxi or limo car.
Buying a Vehicle And License
- When you buy the limousine/taxi and you buy a license then in the end you know you will eventually be