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In the latest quarterly survey of its members, the British Vehicle Rental and Leasing Association found that the business car and van leasing fleet grew by 6.6 per cent year-on-year in Q4 2016. What’s more, leasing brokers signed 27 per cent more new contracts in 2016 than they did in the previous 12 months.
So, why exactly are more and more businesses choosing to lease their vehicles instead of buying them outright? Here are five key reasons for the trend – and why you embrace it for your business…
1. Reliability and reputation
When you lease a car or van, you will receive a brand new vehicle in perfect condition. In addition to benefitting from excellent reliability, you can also boost your business’s reputation with customers as well.
Newer vehicles don’t have to contend with regular maintenance issues and are much less likely to breakdown than older counterparts. As you would expect, this is a huge blessing for businesses that can’t afford to miss appointments with clients or customers. Furthermore, the sight of your shiny new car or van will make an instant first impression on passers-by and could do wonders for your staff morale too.
2. Costs and budgeting
As opposed to buying a business vehicle outright, leasing doesn’t require a large initial deposit. In fact, several leasing contracts have low monthly costs and short-term agreements, which means more available cash and less stuck in fixed.
Seeing as leasing allows for a guaranteed fixed cost motoring experience, you will find it much easier to budget too. You can also enjoy improved cash flow within the business.
3. Servicing and maintenance
It goes without saying that most cars and vans used for business purposes will travel tens of thousands of miles each year. So, in order for them to run smoothly, safely, and efficiently, regular servicing and maintenance is essential.
Unfortunately, this is yet another time-consuming and potentially expensive endeavour. But with leasing, you can sign up to a maintenance package that will cover the cost of any repairs you require throughout the contract.
4. Money and tax
As soon as a car or van leaves the forecourt, its value will plummet dramatically. Choose to own your business vehicles and you are also at the mercy of unexpected market changes in a rapidly advancing industry.
Thankfully, leasing can protect you against the financial pitfalls of owning. What’s more, you can even save money by reclaiming VAT on both finance and maintenance.
5. Freedom and flexibility
Leasing allows you to choose virtually any make, model, size, or shape of vehicle (see here for an example of the range offered by companies). Therefore, you can be sure to find the car or van that perfectly suits your organisation’s specific wants and needs.
Leasing also offers a great deal of flexibility when it comes to the services and terms of your agreement. For example, you may want to increase your mileage limit or enter into a Business Contract Purchase and buy the vehicle after the agreement has ended.