When it is time for your business to get a new vehicle, you may want to consider leasing it instead of buying it outright. Leasing a new business van usually costs less and there are several benefits that you don’t receive when you buy one outright.
Vehicle Leasing Benefits
Whether you’re buying a van for an established business or you’re going out on your own to start your company, there are many benefits to leasing instead of buying the van you need. Some of these benefits include:
- Keeping Your Capital
- Less Depreciation
- Fewer Maintenance Costs
- Update Vehicles Quicker
Before considering a lease for your new van, check to see if your business qualifies for one. Usually, only VAT-registered businesses can take advantage of finance lease deals.
Keeping Your Capital
When you buy a van outright, you have to finance it or use some of the capital you have set aside for your business. However, by leasing a van, you don’t have to use as much capital as you do when buying it. The only outlay you have is the first month’s lease amount and any additional costs you have upon signing a lease. Instead of using your business capital, you can use that money for other equipment or operating costs for your business.
Whenever you purchase a new vehicle, as soon as you drive it away from the lot it depreciates. It continues to depreciate the longer you have it, which reduces its resell value. One of the main advantages of leasing a vehicle is that it doesn’t depreciate as much as buying a van does.
While the value will still depreciate, you may be able to take the depreciation amount off your business taxes. Since a leased vehicle doesn’t appreciate as quickly, the dealer can also get more money for the vehicle after the lease expires by reselling it on his lot.
Fewer Maintenance Costs
Depending on the van lease deals that are available, you may not have to pay for any routine or unexpected maintenance on your van. You would still have to pay for fuel no matter what maintenance option you choose. Along with repair costs, you may have an option to get your van replaced if it breaks down or if you’re in an accident.
Another option will allow for recovery services, so if you do breakdown, your van will be towed in for repairs and they will make sure you get home, all at no additional cost to your business.
Update Vehicles Quicker
At the end of your lease term, you hand the van back over to the dealer and you can drive away in an updated version. You are not stuck with the van until it’s old and breaks down because you cannot afford a new one. This could happen if you had bought it outright.
If you are a VAT-registered business, you should seriously consider leasing your company’s van instead of purchasing it. A lease has many more benefits than buying a van outright.