You need to consider costs – both upfront and monthly – how you’ll maintain them, and also the issue of depreciation and how these will affect the finances of your business. If buying isn’t going to see a return on your investment or you are cash poor and asset rich, then leasing might be worth considering. Here’s a quick guide on how it works for SMEs like yourself:
Leasing allows you to enjoy using a brand new vehicle with minimal up front costs and manageable monthly repayments. However, bear in mind that the vehicle is not yours so you cannot make any modifications to it – or you need to speak with the company you are leasing from to establish what you can and can’t do.
Websites such as LeaseVan feature lots of new vehicles to rent over a set period, usually 2-4 years.
Maintenance can be included in most plans for an additional fee, which means you needn’t worry about finding the funds to pay for a service or MOT while leasing the vehicle. The warranty should also cover anything that could potentially go wrong, meaning you don’t need to foot the bill should a fault occur that was not directly caused by your driving.
It’s important you can make the monthly repayments for your lease vehicle. Ensure that should you have a slow month you still have the money to make sure your vehicle remains in your hands. Missing payments can cause debt issues, something a young SME doesn’t want to deal with. Leasing compared to buying usually means paying less money up front, this can be great for cash flow which can be very attractive, just ensure that you keep enough aside to cover your monthly payments.
You will need to work out how many miles you drive per year in your commercial vehicle, because this will impact the amount you pay back each month. Ensure you are honest with your estimates, because vehicles that go over their mileage caps set by the leasing company will be charged a fee per mile and this can quickly add up to a substantial amount.
You will also need to ensure the vehicle is kept in good order; any damage caused while the vehicle is in your hands must be repaired before it is handed back to ensure you do not incur any fees.
Business vehicle leasing is an excellent way of ensuring you enjoy the latest vehicle technology to suit your needs as you can hand back your rented van at the end of a term and immediately take out another – improving your professional appearance and reputability with customers.