Small businesses scrutinize their spending a lot and why won’t they? Of course all would want to make profits. It is a known fact that a lot of SEM’s rely on vans as they form an integral part of the business. These vans are not only the public face of businesses, but they should also be efficient to run to meet delivery needs. In case you are in need of some new and improved, but do not have sufficient capital for the investment. You may think of van leasing. Today leasing vehicles provide a great alternative to buying fleets. Besides, no more you will have to get stuck with the aging of the vans. However, vehicle leasing can provide you with so many other benefits too.
There are basically two kinds of leases that are made available to the commercial users;
Finance Lease
When it comes to finance lease it is about choosing to pay the total cost of the van, which includes interest charges over a proposed lease period. The cost may also include lower monthly rentals that would be decided depending on the anticipated value of the van. Well, the user here benefits with the fixed cost and doesn’t take up the administration or functioning risks like an unexpected maintenance and losses in the residual value.
In the end of the agreement you can continue with the operation of the van for a nominal fee.
Contract Hire
It is one of the most popular ways of owning of business vehicle. According to this, a vehicle is leased for a specified time as well as mileage for an initial fee. Well, this kind of hire will remove all the risks associated with the van ownership like depression, eventual sale and servicing costs. The hirer could do away with all the potential advantages of van ownership like running costs or may be unexpected upturn.
A contract hire van leasing need not required to be shown as the asset on the balance sheet since it will be owned by a leasing company. Either a part of the rental charge or the total can be offset against the taxable profits. The expert says that rise in the VAT is likely to have impact on the capital available to the small businesses, thus leasing becomes way more attractive since it generates small VAT bill.
So, if you think that leasing would be ideal for you, how will you go about sealing the best deal? Select a company that provides a good overall package. Also, check with the initial deposit, vehicle specification, monthly price, road tax and mileage restrictions. Additionally, find if you want to include running costs in your monthly price. Decide whether you want a light vehicle or a heavy one.
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