Posted by admin on February 3, 2010 under Uncategorized | 
When it comes to understanding the various differences between leasing agreements, it can be quite demanding for the sharpest of minds. What are the best options for the customer? Would it be a wiser move entering into a straight rent agreement?
Hire purchase
When you take out a hire purchase agreement, you will be paying a deposit equivalent to 3 months of the overall rental in advance plus VAT. Repayment periods vary, but a typical one could be 36 months up to a maximum of 60 months. All monthly repayments are exempt of VAT and the charge on the deposit is reclaimable. One other point in its favour is the ability to offset any taxable profit – which is a good boost for any small business. At the end of the lease agreement, the van is legally yours and you are not required to make any more payments.
Finance Lease
When you take out a finance lease agreement, you will be paying a deposit of 1 to 3 months of the overall rental in advance plus VAT. Similar to the hire purchase agreement, your repayments are usually between 36 and 60 months in total. If you are able to claim back the VAT on the deposit, you will only be able to do this on a quarterly basis. One appealing freature is if the van is sold or part-exchanged at the end of the term – 96% of the van value is retained by the lesse.
Contract Hire
Many aspects of this type of arrangement are the same as the finance lease, with the added bonus of a maintenance package. There is none of the hassle for the customer of having to sell the van when the lease term has finished. Sometimes it is known as an Operating Lease. Most of the criteria is the same as above including the cost of the deposit, and the recoverability of the VAT etc. However, you have more budgetary control with fixed costs providing you stay within agreed mileage.
Lease Purchase
Most of the details are the same as the finance lease agreement. Where commercial vehicle leasing differs, is at the end – you sell the vehicle to a third party for a reasonable value and buy it back for £1. Forward an invoice to the finance company with a cheque for 5% of the sale. You then have to right down 100% of the cost and keep the van at the end of the period.
Fiat van leasing is just one of the options out there to choose from.
Posted by admin on January 30, 2010 under Uncategorized |
Van leasing, personal contract purchase, van contract hire, lease purchase and van loans are all different ways to finance the cost of your vehicle. The variety of vehicle financing options available today can be confusing so I thought I would focus on ‘contract hire’ and explain how this technique works.
Leasing deals with one of the biggest issues associated with the acquisition of new vehicles and that is depreciation. As soon as you’ve been handed the keys to your brand new motor its value falls through the floor.
When you take out a van lease the residual value of your selected vehicle is calculated. This is the estimated value of the vehicle at the end of the agreed lease period based on the anticipated mileage during this time. This calculated residual value is then deducted from the manufacturers retail price and the remaining sum is divided up into monthly payments that you will pay over the lease period. So the higher the residual value in comparison with the current value, the less you will be paying each month.
Contract hire is a popular vehicle financing technique that isparticularly beneficial for customers who are registered for VAT such as small businesses and self employed people. If your vehicle is used exclusively for business purposes you can reclaim 100% of the VAT. Even if your van or van is used for some personal use you can still reclaim 50% of the VAT.
In a contract hire agreement you actually hire the vehicle for an agreed period, usually for between 12 and 60 months during which time a fixed rental is paid, based upon the mileage. At the end of the agreed contract hire period, as in the case of van leasing, the vehicle is returned to the supplier. You will not encounter any painful surprise disposal or depreciation costs.
Van Contract hire will generally include full vehicle maintenance which can optionally include routine servicing and even replacement tyres. Up to 100% of the rental charges can be offset against taxable profits and minimal capital outlay is required.
It’s no surprise that contract hire is the favoured vehicle financing option for many businesses and self-employed people.
I am often asked whether these types of deals are extended to pick up truck leasing or small van leasing, as opposed to just van leasing. The answer is yes, with competitive pricing available from Mark Williams.
For van leasing I would recommend Mark Williams Vehicle contracts.
Posted by admin on November 18, 2009 under Uncategorized |
Could the Smart car or hybrid can set the example to the van fraternity and steer it in a greener direction. Many of these van owners are sole-traders, or part or a larger company fleet.
These larger companies could save themselves lots of money in the long run if they had a revolving policy replacing a few vehicle at a time. It wouldn’t be such a bad policy to gradually faze out the old technology and begin to embrace the new. The fuel bills generated by these companies must be alarmingly high. Switching to newer greener technology is likely to have a great impact on running the cost of businesses.
The reduction of cost is particularly relevant to new businesses, who would be making sensible choices by following this path. However, if you are an existing sole trader it is understandable difficult to expect you to trade in your reliable gas-guzzler for an ‘experimental’ one that will run on vegetable oil. If it is shown to save precious cost and help the environment at the same time, then it has to be explored.
It wouldn’t be such a bad thing to drive one of these vehicles, and indeed you would be helping, which is what everyone has to do in the future. What is required is a total change in the way the whole world thinks, and uphill battle but by no means an impossibility. It will take a concencus to reject the old environmentally unfriendly way of doing things before real progress can be measured.
In my opinion, commercial vehicle leasing has been an option out there for many years now and can provide a much cheaper way to achieve what everyone wants. Whether or not Fiat van leasing and Iveco van leasing are going to be involved in the process remains to be seen, but if there is demand then they are sure to recognise this and follow the pattern!
Posted by admin on July 28, 2009 under Uncategorized |
Van leasing is currently helping many businesses to stay afloat during these difficult times. The economic downturn has forced many businesses to look closely at their cash-flow and capital expenditure. Commercial vehicle leasing provides businesses with an effective way to ensure that they have the transport they need with fixed, known monthly repayments.
Van leasing and contract hire have become increasingly popular as businesses recognize the benefits of leasing over outright purchase. These include:
- Fixed, known monthly payments enabling businesses to accurately forecast their finances;
- Low initial down payments mean that businesses can secure brand new, top specification vans for very little initial outlay;
- Maintenance and servicing can be included in the lease price which can save a lot of headaches;
- Leasing is a great way to lessen the impact of depreciation;
- The leasing company can often provide commercial vehicle insurance at very competitive rates;
- No problems disposing of vehicles at the end of the lease period;
- There are tax benefits to leasing as it is classed as rental which means that 100% of the lease charge is tax allowable.
Although van leasing provide some clear benefits to business there are some things that should be borne in mind. One important consideration is estimating the mileage. Some contracts impose what can be costly penalties if the stipulated mileage is exceeded but there are contracts available today that offer unlimited mileage.
Another important aspect of the contract to consider is exactly what is included in the maintenance agreement. Some lease contracts include replacement tires and even replacement windscreens, but always check the details.
Always gather several quotations when shopping around for a good van leasing contract and compare them in detail. Always be certain that you are comparing the exact same vehicles with all of the same options.
Like company car leasing, van leasing is increasingly recognized as a financially viable option for providing a business with the transport needed to stay in business.
