Leasing is becoming a growing method of financing vans principally because of its low cost upfront payments and its beneficial tax treatment. Traditionally businesses used to either buy or hire purchase to finance their vans however as people have got better educated about what leasing can offer the trend has moved this way.
In actual fact van leasing is made up of two products being contract hire and finance lease. With Contract Hire the lease is a long term rental and the van goes back at the end of the contract. The Finance Lease is more akin to hire purchase as the van does not go back and you have the option to sell the vehicle and terminate the lease or extend it into a secondary period. When you sell the vehicle you receive usually 98% of the sales proceeds less any finance outstanding so it is very similar to owning the vehicle.
In terms of tax benefit both leasing products (Contract Hire and Finance Lease) will take advantage of offsetting 100% of the rentals against revenue and are thus hugely tax efficient. VAT is charged on the rentals but can be claimed back if the business is vat registered. The VAT treatment helps keep the initial outlay low as you only have to pay vat on initial rentals rather than the whole van which as you can imagine is a big difference.
Securing van lease deals is a relatively simple process. Working with our approved leasing companies, you will identify the van you would like to lease and the type of leasing deals you require. For example, you could opt for a small van lease, a long term van lease or large van leasing. Once you have the credit in place, the lease company you are working with will purchase the van on your behalf and become the technical owners of the van. From there, you will pay rental payments on an agreed schedule for an agreed period of time.
This leasing structure allows companies to have far greater control over their finances as well as flexibility. Rather than having to pay thousands of pounds to purchase a fleet of vehicles, businesses can lease and pay on a monthly basis. If you’re looking for van lease deals for your business from the professionals.