Leasing is fast becoming the easiest way to drive the newest vans. As an owner of a small business looking to get a van, why not consider leasing?
It is an affordable alternative for small businesses with limited capital, and you can lease as many vans as you need.
Still not convinced? Continue reading to discover the benefits of van leasing!
6 Benefits of Van Leasing
The following are some of the top benefits of leasing a van:
1. Cost-effective
This is one of the top benefits of van leasing for small businesses. You don’t have to have a large capital, nor need to take a loan. You only need to make an initial deposit alongside your regular monthly payments.
Because your monthly payments are made for a fixed period of time, you can easily budget your finances, saving your business from financial stresses.
With van leasing, you can forecast your annual mileage, allowing you to stave off additional costs.
2. Enjoy warranty protections
Another benefit of van leasing is access to lucrative warranties provided by dealerships and manufacturers.
These warranties are included in your van lease contract and cover your vehicle’s maintenance and service costs. So, you won’t have to worry about expenses like tyre replacements, annual check-up costs, brake repairs, etc.
Having these services included in your lease contract not only saves you money but also takes away stress.
You can focus on other aspects of your business and swap your van for a newer one to keep enjoying warranty protections.
3. You need not worry about depreciation
Depreciation in vehicles is the difference in the value of your van when you purchase it and its value during resale.
Under van leasing, you won’t have to worry about depreciation. The finance company or dealership bears the risk of depreciation.
However, upon collection, the lessor will closely examine the vehicle to determine its current value based on its condition. If there are any damages aside from wear and tear, your lessor will charge you for repairs.
The costs of such expenses are non-negotiable and may be pretty substantial. Therefore, you should check the van and fix any damages before returning it to the lessor.
4. Greater flexibility
Flexibility is one of the added advantages of van leasing. There are many options included in the lease agreement that you can tweak, including what van model you want, the length of the lease, added extras like breakdown covers, and what options you can exercise at the end of the lease.
For instance, you can decide to return the van at the close of the lease or upgrade to the latest van. You are also free to set your mileage limits.
5. Tax incentives
Did you know that van leasing provides you with tax deductions? Yes, leasing a van for your small business entitles you to tax benefits like reclaiming VAT on your monthly payments.
However, you can only enjoy this benefit if your van is VAT-registered.
Leasing allows you to reclaim up to 100% VAT on your monthly rentals if your van is used solely for business purposes. However, you can also recover 50% VAT if it is used for personal and business purposes.
When filling out your tax return form, you can also claim your van’s rental as part of your expenses. This is only possible if your monthly payments are tax-deductible expenses. If you are not sure about your tax options, endeavour to contact your accountant for guidance.
6. Access to the latest models of vans
Another beautiful thing about van leasing is that it allows you to drive the newest models every few years. With newer models comes increased reliability, durability, fuel economy, and manufacturer warranty.
Reliability improves productivity since there is a slim chance of your van breaking down. This reduces your business costs and shields your van from the performance challenges associated with ageing vehicles.
So, once you close your lease, just swap the vehicle for a brand new van!
Conclusion
While the thought of purchasing your own van may seem exciting, splurging a huge chunk of your capital won’t be advisable. As an SME owner, one way to maximise profits and reduce costs is by leasing a van for your business operations. Van leasing offers several benefits, and you can tailor your lease contract to meet your budget and needs.
