While purchasing a van for your business may initially seem like a most suitable solution considering you would not have to worry about ongoing payments. You would also have no mileage constrictions and the vehicle would be in your ownership. However, there are also a few significant downfalls associated with purchasing a new vehicle. Even though you would be able to enjoy ownership, you would also have to fork out a small fortune, which may negatively impact cash flow for startups and smaller-scale businesses. On the other hand, opting for vehicle finance to purchase a van for your business would ultimately cost a fortune when taking into account you would be paying extremely high-interest rates on the vehicle loan.
Competitive Van Leasing Deals
Certain leasing providers offer incredibly competitive van leasing deals that ultimately out-weigh any benefit owning a van ever could. With the solution of leasing, you would not have to pay a large upfront fee and you would also be able to take advantage of the reliability associated with new vehicles rather than settling for a used van simply because you would like to reduce the amount spent on a van as much as possible. Leasing through your business would also allow you to take advantage of tax benefits that purchasing would not.
Reducing Expenses With Low Monthly Payments
The vast majority of startups and small businesses will inevitably find themselves confronted with cash flow issues at one point or another. One of the most effective ways to improve cash flow is to reduce company expenses drastically. This means reducing supply and production costs. Another fantastic option to reduce business costs is to opt for leasing a van rather than purchasing one. This is mainly because your monthly leasing premium would usually include maintenance costs, which would otherwise be a major company expense that would affect cash flow. Vehicles depreciate in value, and therefore, purchasing a liability would not be a wise move for a smaller business.
Relief From Tax
Taxes can be daunting for anyone, but especially for smaller businesses battling to establish significant growth in an uncertain economy. One of the most alluring benefits of van leasing for businesses is that you will be able to take advantage of 100% tax relief on value added tax. In addition to this, if the van is used solely for business and not for private use, you will not be subjected to company car tax either. This benefit will ultimately save businesses a small fortune in the long-run.
Manage Costs With Ease
While there is absolutely no doubt that leasing is a far more affordable solution for businesses, it is also a notable element that you will be able to manage company costs with a lot more ease. Because your leasing deal will specify a fixed rate for the term of your van rental you will be able to have absolute certainty each month. Alternatively, owning a vehicle and worrying about potentially pricey repairs will not be able to provide any real certainty.