The benefits of van leasing
Van leasing continues to grow in popularity, and has seen unprecedented growth within the past decade as businesses look to ever more resourceful ways to run their operations more efficiently. However there remains a segment of the market that is unsure as to what the benefits of van leasing really are. In addition to this, many businesses sometimes confuse van leasing with other forms of funding for their fleet vehicles. In this guide we look at what van leasing really is, what the benefits if it are, and why so many people have taken up the offer of leasing, rather than buying, their vans.
What van leasing is, and is not
Van leasing is not based upon the price of the vehicle if you were to buy it, instead it based on what is known as its ‘residual value’; this is how much the van will be worth at the end of your lease, after the inevitable depreciation is taken into account. The amount you pay on a monthly basis is then based around this amount. At the end of your lease you return the van to the lease company. Here you will have the option of taking out a new lease, on a new vehicle, or alternatively you may be able to keep the vehicle (depending upon what your contract dictates). You will be offered a choice of a straight lease or a lease purchase(the latter give you the option to buy the van at the end of the lease period).
If you are unsure that you want to invest money in buying a new van - then van leasing is the way to go. You will be able to drive a new van every few years.
You get to drive a brand new van every 2-3 years - so that is a great incentive to go for van leasing.
The benefits of van leasing
Leasing, rather than buying a van, means that you’ll have lower monthly repayments, as opposed to buying a vehicle outright. Because your payments are based around deprecation, you don’t need to worry about keeping up with high repayments on a vehicle that is always losing value.
The ability to budget is an additional advantage of leasing, because you know what you’ll be paying each and every month. As well as this, your cash can be retained in a high interest savings account, rather than being spent on a vehicle that will, in effect, lose you money.
Why so many businesses are leasing their vans, rather than buying them
Because of the wide ranging and far reaching benefit of van leasing, it is becoming an ever more popular method of sourcing vehicles. In addition to the benefits mentioned above, companies also sometimes find that they do not have the spare capital to place the large deposits that new, or even second hand, vans require when purchased through hire purchase or other similar finance agreements.
In addition to the set monthly payments, companies also benefit from not having to pay road tax, as this is included within the van lease deal. Furthermore, at the end of the period, the company need not worry about selling their vehicle to buy a new one (which will start the process of having to find a large deposit again). Most lease packages even include maintenance and breakdown cover so that is already much less hassle than buying a new van on finance.
There are many reasons why companies are looking towards van leasing as an increasingly attractive option to purchasing out right, and with so many benefits, the van leasing industry doesn’t look set to slow down any time soon.