Should I lease vehicles for my business? What are the advantages?
9th April 2019
Leasetree look to answer your most common Business Leasing and Finance questions
There are loads of real advantages for small, medium and large businesses in leasing vehicles rather than buying a van or car outright.
So what exactly are the advantages?
Its in the look. For starters, you get to use a new (or newer) vehicle which looks good and enhances the perception of your company. Perception is important and an ageing van is hardly a good advert whilst a nice new shiny van sends all the right signals to prospective clients and customers.
Depreciation is very real. Cash flow is key for any business. If you buy a new car or van for your business, the vehicle depreciates the moment you or one of your employees get in it. The VAT on the vehicle goes straight to the tax man, dealerships need to factor in their costs or running their business and a car or van could lose up to 40 per cent of its value even if it’s virtually new – check out this site for a reality check on how cars and vans depreciate.
Why make depreciation your headache – make it someone else’s problem.
Capital is King. By paying smaller amounts on a regular basis, small and larger businesses alike can budget better and you can keep precious capital in your business account rather than giving huge sums to a car or van dealer.
In some cases, leases and business contract hire qualify as being “off balance sheet” altogether meaning that you can keep your debt to value ratio low which is important if you need to borrow money for other uses within your business or you want to maintain a solid credit rating.
Asset repayments in a leasing contract normally count as a business expense resulting in even more tax efficiency, though you should always consult your accountant as tax rules change from time to time.
Ask yourself the question – Would I rather fork our huge sums of money for an asset that immediately depreciates or am I better off keeping the money in the business with potential tax gains to boot?
What other good reasons are there to lease cars or vans?
Just because a car or commercial vehicle is leased, does not mean that there are not massive new car and van bargains.
LeaseTree’s partners order huge amounts of new cars for leasing – for which they get an equally large discount which they can pass onto you. In addition, when models come to the end of their production the manufacturers want to move onto producing the new versions and release the older (but still brand new) model at a discounted price.
This discount reflects in lower lease costs so bargains are often the norm when it comes to leasing agreements. LeaseTree are in the perfect position to supply you with brilliant lease deals on new cars and also great lease deals on used cars. We partner with companies that buy cars in bulk from manufacturers so our offers reflect this with great monthly prices for you.
Adding extras is easy. As a further plus, it’s possible to roll maintenance, servicing and even the likes of GAP insurance into the car or commercial vehicle lease deal. Amazingly, you can often include tyre replacement into the deal so that leasing truly becomes a hassle-free option. Imagine, no concern about depreciation, cash flow, maintenance or servicing.
Leasing means one budget-friendly monthly payment with peace of mind all round and the knowledge that when the lease is finished you can simply hand the van or car back…and get another…new one!
On the point of newness, cars and vans improve every year whether it be safety standards and equipment or driver and passenger advances. Think back 5 or so years when Bluetooth was not the norm in new vehicles. Having the flexibility of being able to hand the vehicle back when the lease is up, you stay ahead of the safety and tech trends with options like lane assist and blind spot recognition.
Used car and van leasing. It’s important to note that you can make even further savings by leasing a used vehicle and Leasetree has access to hundreds of used vans and cars which are available on business van lease deals and on business car lease deals.
No deposit car and van leasing. We also have no deposit lease business deals or deals where you can flex the initial rental or deposit and your new van or car can be delivered to anywhere in the country.
When is leasing not a great idea?
If you are going to do huge mileage in your business vehicle then its best to ensure that the excess mileage charges are not too high. Also, if your business vehicle is likely to take a lot of punishment and incur damage in the course of your work then you should weight up Hire Purchase (HP) versus Leasing as in the case of HP the car or van is yours at the end so there wont be any fair wear and tear charges to worry about.
Traditional business car finance and business van finance deals like Hire Purchase are also available if you prefer to finance rather than lease.
Whatever way you look at it, leasing has massive advantages for businesses in most cases no matter the business size which is why more and more businesses are switching to lease.
We have all of the major lease & finance options available to you from Business Contract Hire (BCP) through to Business Contract Purchase (BCP), Hire Purchase (HP) and Lease Purchase (LP) and you can find more details on how each one works here.
Leasetree makes it easy for you to get a deal that suits YOU.
If you see a deal you like, click on it & fill in the short application, safe in the knowledge that our partners only use soft search in the first instance… sit back and wait for the market-leading deals to come to you.
If you need help or you don’t see a car or van that suits you simply fill in the Get a Quote form as we have access to thousands of new and used car and van deals.
Best of all, our service is completely free – now that makes business sense!