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March 9th, 2022
There are a huge number of benefits to choosing vehicle finance, as opposed to buying outright. By choosing to lease, you’ll avoid having to pay for your new vehicle in one chunk of capital. You’ll also avoid investing in an asset which will depreciate in value over time. In addition, you’ll reap the tax benefits of leasing, and free up capital to use elsewhere in your business. Using a van finance company will also mean less admin on your part, as they will source the vehicle for you and get you the best financing deal.
We aren’t accountants, but we can give you the basics on how leasing and tax works. – All rentals are subject to VAT and are 100% offset against revenue for business use.
Did you know that leasing a van for business can allow you to claim back VAT? In that sense, leasing has a huge bonus over purchasing. In many cases, business owners are entitled to 100% relief on VAT for van rentals. Furthermore, if you use a van solely for business, and not privately, drivers are not subject to company car tax.
You can find more information about this on the government website and of course, always check with the van finance company. Tax deductions can provide a significant saving for your business.
By opting for vehicle finance, you’ll only need to pay for a portion of your new van upfront. This means are able to use the capital you’ve saved elsewhere in your business. Your van finance company will advise you on types of vehicle finance available to you. This will include van deals where you can spread the cost of VAT over the length of the agreement. Meaning, you save even more money upfront.
When you purchase a vehicle outright, every year it will decrease in value. However, a van finance company will work out your payments based on the projected future value of your vehicle at the end of the lease. Meaning, you haven’t invested in a depreciating asset.
Driving new vans looks great for your business, so you’ll be glad to know that you can upgrade your vehicle very easily. You can agree to a specific lease length on your van deal.
Depending on your business van lease, you will have different options for ownership. If you want to own the van at the end, there’s a deal for that. If you don’t want the option for ownership – maybe try Contract Hire. Talk about end of lease options with your van finance company and take advantage of the flexibility of leasing.
There are many reasons why we think leasing is better than buying. For more information, just read through some more of our blogs. Or, if you’d prefer, just call 01179625314 to chat to one of our leasing specialists, obligation free!
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