chevron icon-hand icon-pig icon-van logo-leasetree

The complete guide to business car leasing and finance

9th April 2019

Should I lease vehicles for my business? What are the advantages?

9th April 2019

Why lease a van?

There are loads of real advantages for small, medium and large businesses in leasing vehicles rather than buying a van or car outright.

Keeping up appearances

For starters, you get to use a new 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.

Cash in your bank

Cash flow is critical for any business. If you buy a new car or van for your business, it depreciates the moment you or one of your employees get in. 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 or even 50 {ce1f5a97386adb343f3d9b12b92f2c65f76aa8e98ead3145386a848fb9911aa8} of its value even if it’s virtually new. Why make depreciation your headache?

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.

Leasing looks better on the balance sheet

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.

Tax efficiency, but make sure you double check!

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 and releasing it slowly and on a regular monthly budgeting basis with all the flexibility of leasing a car or van?

Other good reasons to lease a van

What other good reasons are there to lease a new or used van?

Just because a car or commercial vehicle is leased, does not mean that there are not massive 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 as such, release the older (but still brand new) model at a discounted price which will reflect in lower lease costs so bargains are often the norm when it comes to leasing agreements.

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 even include the tyre replacement into the deal so that leasing truly becomes a hassle-free option.

Another good reason is that Hybrid and All Electric Car Lease deals and also Hybrid and All Electric Van deals are increasingly becoming the norm which means you can access business cars and vans that cost peanuts to run whilst knowing that any maintenance or warranty issues are for the leasing company…not for you!

Stay abreast of safety advances in cars

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 – by 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 leasing and No deposit leasing are also an option

  • It’s important to note that you can also make further savings by leasing a used vehicle and Leasetree has access to 100’s of nearly new and used vans and cars which are available on business van lease deals and on business car lease deals.
  • We also have no deposit lease and also business leasing 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. Traditional business car finance and business van finance deals like Hire Purchase are also available.

You know leasing makes sense

Imagine no concern about depreciation, cash flow, maintenance, insurance, servicing….all taken care of in 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!

Whatever way you look at it, leasing has massive advantages for businesses no matter their size which is why more and more businesses are switching to lease.

We have all of the major lease options available to you from Business Contract Hire (BCP) through to Business Contract Purchase (BCP), Hire Purchase (HP) and Lease Purchase (LP). Here is a quick rundown on how each type of car or van business finance works:

  • Business Contract Purchase (BCP)- This type of lease is very much the same as a personal PCP lease deal that most are familiar with. You can choose whether to hand back the car at the agreed term end or to keep the car and pay off or even re-finance the “balloon payment”
  • Lease Purchase (LP)– is similar to BCP but you don’t have the option to hand the car back so you must either pay off the balloon payment or refinance the deal.
  • Business Contract Hire (BCH) differs in that you must hand the car back at the end of the lease period. It has the advantage of you not worrying about depreciation or “balloon payment” or refinance issues. In a way, its the purest form of leasing as you will never own the car nor have the option to do so.

Leasetree makes it easy for you to get the best and wide range of van or car lease deals from our huge panel of partners and lenders.

If you see the deal you want,– simply click on it and fill in the short application safe in the knowledge that our partners only look to use soft search in the first instance, sit back and wait for the market-leading deals to come to you.

If you don’t see the exact deal for you…worry not. Just click on this link here and tell us about the make and model car or van you are after…we have thousands and thousands of ready-made deals.

If the car or van is for an employee, check out these hints and tips when it comes to understanding Benefit in Kind Tax and how it works here.

At Leasetree, our service is completely free – now that makes business sense!