If you are running a business that calls for the use of vans, finding a resolution about where to acquire them can be a challenging task. Whether you need a single van, or a fleet, you have a number of options to consider and purchasing, hiring or leasing is usually the first question business owners need to ask themselves.
In this article, we focus on the growing option of leasing. To help, we’ve collated for you options to consider and their respective advantages and potential risks.
Before you begin though, you should be clear on what your needs are, the frequency of use, the likely mileage during the next 12-24 months and most importantly, the overall safety of your employees.
Van lease or contract hire is an arrangement that is set within a specified time in which you make monthly instalments of an agreed amount. Some dealers may require you to pay a deposit, but the size of the deposit and the length of the term is often negotiable.
Having monthly contracts might not be practical if you do not have regular daily deployment - so it would be counter-productive to enter into a leasing agreement - a daily hire arrangement might be a better option.
If the need is to deploy people and products regularly, then leasing or outright purchasing are good options - the decision often comes down to the funds you have available for a purchase v’s the deposit for a lease agreement.
Before making a final decision, take into consideration the financial status of your business. It is also worth looking at the total cost of ownership, potential benefits and any return on investment you might get.
There are several considerations for used van leasing. Primarily, leasing offers a considerable amount of cash flow release compared to buying outright - minimising the cash strain on your company early on. Another benefit of leasing used vans is the accumulation of tax-deductible lease payments. That is another reason that leasing is growing in popularity.
If you prefer to pay in cash, you are obliged to pay for the VAT of the leased vehicle upon usage. Obviously, the more expensive the van, the bigger the VAT payment. In most cases, the deposit value is usually 10% of the vehicle’s leasing value. To lighten your burden, you can negotiate to spread the deposit and/or VAT payments across your monthly instalments.
Either way, dealers and lease providers are often open to discussing deals that work for both you & them.
Just like everything else, van leasing comes with its own set of advantages. Here’s a closer look at some of them.
While van leasing does offer a lot of benefits, there are also notable disadvantages to consider:
Aside from second-hand vehicles, new vans are also available for leasing. The process of van leasing is rather simple. You just need to find a reliable and trusted vehicle dealer, choose a vehicle or fleet of vehicles, solidify the leasing terms, pay the agreed monthly instalments and return the vehicle at the end of the agreement.
With that in mind, it only takes five steps to start this venture. When it comes to choosing the make and model of the vans, make sure they will fit the purpose it is intended to do. After that, negotiate a deal that will prove beneficial for you and the vehicle dealer. After closing the agreement, the new van will be delivered to you. You get to drive and enjoy it in any way you can. When the lease agreement comes to a close, all you need to do is return the vehicle in good working condition. The process does sound simple because it is!
The only disadvantage of this, you shoulder all the repairs if you are in an accident or any malfunctions. New vehicles are modestly used by the service providers. You have to be careful in handling them or you would have to pay more than what you have entered into.
In the end, whichever option you choose you to need to consider the finances of the company and the long-term implications that it has on your business and operations. Typically, van leasing agreements last for a year or two, depending on the initial agreement. You might want to consider being modest in the first few months before jumping to take a full-blown contract agreement with them. This way you have a leeway to assess if your current situation requires this and if there are other service contractors available that provide equally dependable service but at a more reasonable price. So choose. Do the research and take your time understanding your needs.
Want to get the best price deals for van leasing? Check out Big Van World. They offer a wide collection of used cars and vans of various models, makes and prices that are updated daily. Every day, there is a deal that will be sure to fit your needs.
If you want to learn more about leasing used vans for business or personal use, why don’t you talk to the experts at Big Van World today? You can make a general enquiry, get a quote on a van of your choice or grab a limited offer as soon as they are out. You can contact us on 01793 751866 or fill out our contact form here.