Basically, leasing means that you agree to use a vehicle for a specified period of time, during which you will make monthly payments, maintain it, purchase required licenses, pay taxes, keep insurance, and return it at the allotted time with nothing more than normal wear and tear.

There are different types of leases with different financial benefits for your company. The most common type of lease is the Closed-End (aka Operating) Lease from which you can obtain tax benefits by deducting 100% of your lease payments from your income statement. Or, you can claim depreciation and deduct the interest expense from your lease payments under an Open-End (aka Capital, Finance, or TRAC) Lease.

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