Dissimilar to what many think, vehicle leasing is available to the public in addition to businesses. Most individuals or businesses thinking of taking out a motor vehicle lease or motor vehicle leasing agreement, will most likely end up going down the contract hire route (often called 'personal contract hire' where individuals are concerned).
Not only does contract hire
car leasing allow the lease customer to profit from having the vehicle taken back on the finish of the lease period, instead of being saddled with a depreciating asset, it might also present a tax-saving option to individual company car drivers.
'Contract purchase', however (referred to as 'personal contract purchase' for non-business customers) can provide the lease customer with the choice of buying the motor vehicle, once the lease period is over, at a price agreed on the outset of the lease agreement. In some cases, the lease customer will benefit should the real worth of the motor vehicle on the end of the lease period be larger than the worth originally anticipated at the beginning of the lease.
However, for companies, there are two other types of motor vehicle leasing: 'lease purchase', whereby the firm commits to purchasing the car at the finish of the lease interval, and 'finance lease' where the car is sold on the finish of the lease interval, so that the leasing firm recovers the total acquisition value of the motor vehicle, with any balance from the sale going to the business.
For small companies, credit can be hard to come by, even with a promising economic plan or self-evident commercial success. In the case of securing vans however, acquiring credit is one thing the sensible business-person doesn't have to fret about.
Van leasing permits a company to enjoy long-term access to the newest makes and models of vans, with out having to meet the strict criteria needed for a financial advance from a bank.
Van leasing works on the principle of accessing one's personal choice of van in return for a fixed monthly fee to a leasing company. Van leasing prices are normally much cheaper than the equivalent month-to-month payments for a finance purchase settlement or loan, simply because they're based mostly on the amount by which each van depreciates throughout the lease period, rather than on a van's purchase price.
Depending on the needs of the firm, van leasing can involve: a return of the vans to the lease company on the finish of the 2 to 4 year lease period, the choice to buy the vans once the lease period is over, or the provision for the lease company and the company to sell the vehicles on the end of the lease time, with the business benefitting from any returns over and above the balance of the original purchase prices.
