Owning and operating vehicles can be an invaluable asset for many businesses. However, sometimes the financial burden of buying and maintaining them can make it prohibitive.
That’s why commercial vehicle leasing might just be the perfect solution for your business. Commercial vehicle leasing allows you to have access to high-quality vehicles over an agreed period at regular fixed costs. It provides access to vehicles without having to commit upfront capital or losing money on depreciating assets.
With this affordable option becoming increasingly popular among businesses everywhere, let’s explore how you too can benefit from commercial vehicle leasing and improve your cash flow.
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Commercial vehicle leasing is a beneficial way for companies to bring vehicles into their fleet while conserving cash resources. The process of business vehicle leasing works in a relatively simple way:
At the end of this duration, the lease agreement can be renewed or terminated depending on the needs of the business.
Leasing business vehicles is a great move for businesses of all sizes, providing a whole range of benefits that outright purchasing doesn’t.
With vehicle leasing, your business avoids the large upfront cost of purchasing vehicles. Instead, you can access more models for lower monthly payments over an agreed period.
Flexibility is one of the key advantages – you can choose whether you keep long term commitment to the vehicle. You will be given the choice of ownership at the end of your agreement by paying a balloon payment. Or you can return your vehicle with no balloon required. Alternatively, you can hand your vehicle back and upgrade your vehicle by taking out a brand new agreement.
Leasing also helps to improve your cash flow as it allows you to preserve your precious cash. Cash that can be used in different areas of the business!
Not to mention it helps you to manage your cashflow better as you know exactly how much will be due every month, allowing you plan with greater certainty.
For those reasons and more, it’s no surprise that many companies choose to lease their business vehicles.
The idea of a finance lease for commercial vehicles is relatively simple and straightforward. The finance company buys the vehicle for the business, who then pays a fixed monthly fee to use it over an agreed term.
This type of leasing has no large initial outlay, and there are generous tax allowances available. Thus making this kind of leasing ideal if you’re looking to conserve capital expenditure or manage cashflow better.
Benefits of this agreement type include:
Hire purchase is a viable option for those looking to purchase commercial vehicles. The agreement outlines that you, as the buyer, would pay an initial deposit and then agree to make monthly payments for the remainder of the overall cost. This initial payment reduces the amount of credit needed from the finance company, leading to lower interest rates over the life of the agreement.
Unlike an operating lease, hire purchase allows you to own the vehicle at the end of its payments, but gives you rights to use it before that point. This can be a great option for businesses who need more flexible repayment plans and don’t want to tie up large amounts of capital all at once.
Benefits of this agreement type include:
Sale & leaseback is an attractive alternative financing option for commercial vehicle owners. It involves selling a vehicle that you own and leasing it back from the buyer. Many businesses go down this finance route to maximize cash flow and preserve their cash to be used elsewhere in the business.
However, please bear in mind that sale & leaseback is only eligible for assets purchased within the last 6 months.
Benefits of this agreement type include:
Get in touch today to explore your options in more depth with expert advice. Give us a call today on 01494 611 456, or send an email to fleet@westwon.co.uk.
