Regardless if your company is local or global, vans can be a fundamental element in providing the quality service your client expects from your business. However, before you contact a reputable provider like Global Van Solutions, you must assess what financing option to take out. Doing so will ensure that you will not go over your budget.
The following are the four options you have when it comes to financing a commercial vehicle purchase:
• Van finance leasing
• Van lease or hire purchase
• Van contract hire
• Outright purchase of the van
Van Finance Leasing
This option offers great benefits to business with respect to both cash flow and tax-deductible savings. Van finance leasing is a scheme that has been introduced to be of benefit to the self-employed, sole traders and limited and partnership companies.
Van finance leasing usually covers the following aspects:
• Length of leasing period (generally 1-5 years)
• An initial-deposit, which can vary depending on how much you wish to outlay
• The value of the vehicle
• An agreement of a balloon final repayment at the end of the leasing period which will also determine the cost of the monthly repayments
Van finance leasing is generally a fantastic way to finance a vehicle. It offers the benefit that every payment on the van is tax deductible, meaning that you will get back a large slice of your outlay providing that the van is used for employment use only.
Van Lease or Hire Purchase
This differs from the previous option in the sense that you will agree on a repayment scheme knowing that at the end of the repayment period you will own the vehicle.
The advantages of a van lease or hire purchase are as follows:
• The option to reduce monthly costs by agreeing on a pre-purchase cost
• No mileage restrictions
• An alternative line of credit that does not interfere with your bank finances
• Balloon repayments options
Contract Van Hire
This is the most popular option for companies with respect to VAT benefits. Many organizations are now turning to this method as it offers minimal outlay on costs with respect to maintenance and vehicle relief. Contract hire packages offer such benefits as:
• Tax deductibility with respect to the vehicle value
• Flexibility while within the contract
• No disposal issues
• Road fund license for the length of your contract
The major benefit for contract van hire is that all the aspects of the running of the vehicle are covered in one agreed cost. Even though you will not own the vehicle you are comfortable with the knowledge that your fixed monthly payment ensures you from any unforeseen circumstances. Obviously, this is providing that you have included them in your contractual agreement.
Outright Purchase of the van
Obviously, the last option for obtaining a van is to buy it outright. There are many advantages to buying a van outright such as:
• The van is totally yours and becomes an asset for your business
• If you are paying cash, you are in a better position to bargain with the dealer
• You have no restrictions on such things as mileage, which is quite common in a lease and hire contracts
These are the various options open to you when you are looking into obtaining a van. The most important aspect to consider is what option suits you best in terms of cost.