Contrary to what many think, vehicle leasing is accessible to the general public as well as businesses. Most people or companies thinking of taking out a motor vehicle lease or motor vehicle leasing agreement, will in all probability end up going down the contract hire path (known as ‘personal contract hire lease’ where individuals are involved).
Not only does contract hire car leasing allow the lease customer to profit from having the motor vehicle taken back at the end of the lease period, instead of being saddled with a depreciating asset, it may well also provide a tax-saving option to individual company motor vehicle drivers.
‘Contract purchase’, alternatively (known as ‘personal contract purchase’ for non-business customers) presents the lease customer with the option of buying the motor vehicle, as soon as the lease interval is over, at a value agreed at the outset of the lease agreement. In some cases, the lease customer will benefit should the actual worth of the motor vehicle on the end of the lease interval be larger than the worth initially anticipated at the beginning of the lease.
Nevertheless, for companies, there are two other sorts of motor vehicle leasing: ‘lease purchase’, whereby the company commits to purchasing the vehicle on the finish of the lease period, and ‘finance lease’ where the car is sold on the end of the lease period, so that the leasing company recovers the full acquisition value of the vehicle, with any balance from the sale going to the business.
For small companies, credit could be hard to come by, even with a promising financial plan or confirmable commercial success. With regards to securing vans however, acquiring credit is something the sensible business-person does not have to fret about.
Van leasing enables a small business to enjoy long-term access to the newest makes and models of vans, without having to satisfy the strict criteria needed for a financial advance from a bank.
Van leasing works on the principle of accessing one’s own choice of van in return for a regular month-to-month fee to a leasing company. Van leasing costs are normally much cheaper than the equivalent monthly payments for a finance purchase agreement or loan, just because they are based mostly on the amount by which every van depreciates throughout the lease interval, rather than on a van’s acquisition price.
Depending on the needs of the business, van leasing can involve: a return of the vans to the lease company at the end of the 2 to 4 year lease interval, the option to purchase the vans once the lease period is over, or the facility for the lease firm and the company to sell the vehicles at the finish of the lease period, with the business benefitting from any returns over and above the balance of the original purchase prices.
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