Van Leasing Advantages for the Small Business
If you run a small business that requires the use of a commercial vehicle or van there are numerous advantages in leasing over outright purchase. I’ll just summarise some of these for the benefit of any business person currently considering whether to lease or buy.
No huge down payment: One of the biggest advantages is that, whilst there is usually a deposit due at the beginning of van lease period, this is not a huge amount as it can be when you buy.
Fixed, known monthly payments: A big advantage for any small business is knowing your monthly business motoring costs. This enables you to produce accurate financial forecasts which your bank manager will love. You will also be pleased to find that the monthly van lease costs are often lower than the repayments on a loan to purchase the same vehicle would have been.
Get the vehicle you want: Rather than be forced to compromise and maybe settle for a second hand van you can choose exactly the model that you and your business needs. Create the right impression with your clients with an up-to-date modern van.
Easy disposal of used vans: Anyone who runs a business that uses and abuses commercial vehicles and vans will know that it can sometimes be difficult to dispose of high-mileage used vehicles. Leasing your van alleviates these problems as all you need to do is return it to the leasing company and pick up a new one.
VAT is recoverable: If your business is registered for VAT then you will be able to recoup some (possibly all) of the VAT paid on your monthly van lease payments. This is clearly a significant advantage for anyone running a business.
Maintenance and servicing costs reduced: By making the leasing company responsible for some of the servicing and maintenance of the vehicle you can lessen the costs and headaches that you may otherwise have had to bear.
With all of these advantages it’s amazing that anybody running a small business that needs a van or commercial vehicle would even consider outright purchase There are, however, some potential disadvantages to van leasing over purchase.
One clear disadvantage is that the vehicle is never owned by you, the business person. The van remains the property of the leasing company. It is often possible to negotiate ownership at the end of the lease period, but this may not be overly beneficial for your business.
Another potential disadvantage relates to the maintenance agreement. Many van lease contracts will make the leaseholder liable for any damage or repairs to the vehicle. It is therefore enormously important to ensure that these aspects of your van lease contract are agreeable before you sign.
One of the most significant disadvantages of van leasing over outright purchase relates to mileage. Leasing a van generally involves agreeing a maximum mileage that will be accumulated in a year. If this mileage is exceeded then additional, sometimes significant costs will be incurred. To avoid this possibility it is vitally important that you accurately calculate how many miles your newly leased van will be required to travel in a year and then add a few more on for good measure.
It is clear that van leasing provides the small business person with a number of significant advantages. When comparing quotes from various van leasing firms do be certain that you are comparing like with like. There are so many vehicle model variants and differences in van leasing contracts that it is often quite difficult to be certain that you are comparing two identical vehicles available on identical contracts.
This entry was posted on Tuesday, March 18th, 2008 at 11:37 am and is filed under Car and Van Info. You can leave a response, or trackback from your own site.
