Van Leasing for Small Businesses
If you run a small business and you need a van, then leasing one can be advantageous compared to purchasing one outright. This article outlines some of these benefits.
Firstly, leasing does not require a large down payment. Although a leasing deposit is often required, it is mostly significantly less than when purchasing a van
Next, leasing provides a good way of budgeting. The monthly payments are fixed for the period of the lease which can be up to five years, so your cash flow forecasts will be accurate into the future. In most cases the payments will be less than those you would make on repaying a purchase loan.
As the payments are lower, there is the opportunity to get a better van for the same monthly outlay which is an opportunity to improve the status of your business.
If you opt for a contract hire type of agreement, you do not have to be concerned about what happens at the end of the lease. You simply return the van to the dealer. Maintenance and repair can be factored in with the lease, which protects you from any unpleasant surprises should your van break down.
There are some downsides to leasing that you should take into consideration also. With a contract hire agreement there are restrictions concerning the mileage that the van covers along with the minimum condition in which the van must be returned. If additional miles are travelled then there is a surcharge for each mile, and if the van is returned in a poor condition then there is also a surcharge.
As we have already alluded to, there are different types of van leasing models available. In addition to contract hire there are models in which the van becomes the property of the business at the end of the lease subject to making a final payment, often referred to as a balloon payment.
Each of these models has benefits and drawbacks and the one that is the most appropriate for any specific business will depend on individual circumstances and these should be discussed with the dealer before taking out the contract.
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