Benefits of Leasing:
Capital and security
Van contract hire incurs a monthly fee whereas buying requires an initial outlay whether it be the full vat on the vehicles price on a Hire Purchase agreement or the full amount should you want to own the vehicle outright.
This can be difficult for a companies cash flow that do not have the spare capital available or have plans to use the capital it in other areas of the business like expansion or keeping an emergency fund for managing a downturn in revenue.
As we enter uncertain economic times through the 3rd and 4th quarters of 2019 these two factors are very big for companies looking to make decisions!
The upkeep of the vehicle and the avoidance of unexpected costs can be achieved by taking out maintenance packages on the leased vehicle. Again allowing businesses to forecast costs more accurately.
Lower Running Costs
Leasing a new vehicle will give you a vehicle with very low running costs, new technology in engines help to give you the best mpg or you can look at Hybrid or all Electric vehicles to ensure your business vehicles are running as cheaply as possible.
Covered by the manufacturers warranty and breakdown cover changing the vehicle on a strict cycle once this expires using a lease funding method means you are really keeping problems, downtime and repair bills to a minimum!
Benefiting from new legislation
The government’s revised road tax laws and levies on CO2 emissions has bumped up the price of owning a vehicle. With manufacturing prices likely to rise when Britain leaves the European Union, the price of buying a van for your business could be £thousands more expensive.
Annual running costs could also rise for van owners with older vehicles – which may ultimately force businesses to purchase new vehicles or opt for the cost-effective solution of van business leasing.
Lease is a great way to be able to take advantage of these benefits and avoid unnecessary costs like congestion zone charges etc
The costs of a van contract hire are fixed in the terms of the agreement. You, therefore, have a predictable monthly outlay which makes it easier to manage your expense accounts. Furthermore, there should be no unexpected costs to fork out if the vehicle breaks down when its covered under warranty
Business owners are entitled to 100% relief on VAT on van rentals. Furthermore, if you use a van solely for business, and not privately, drivers are not subject to company car tax.
For drivers that have access to their van for personal use HMRC also offers businesses a fixed BIK rate (Benefits in Kind) which is currently £3,170 (tax year 18 / 19). If you are in the lower income bracket of 20% you will pay a flat rate of £633 per year.