Image source: https://cdn-ds.com/stock/2016-Mazda-CX-5-GT-AWD-LOCAL-VEHICLE-LEASE-RETURN-TECH-PACKAGE/seo/ECL11415-JM3KE4DY2G0626054/sz_55245/w_640/h_480/58626a992d4fcc28dc0499f3a9a9b87b.jpg
Sometimes, businesses may have to provide their employees with cars. If its a small company then, it might get difficult for them to buy and operate their own line of vehicles. In such cases, leasing cars from a company that provides this kind of service can be the most beneficial choice.
Renting vehicles for business is a very popular activity in the UK and many companies, whether big or small, take advantage of this service.
More reasons to rent a car:
Buying a fleet of cars can be very expensive and maintaining them and paying their insurance can cost even more. So, leasing instead can be advantageous and an economical option.
Not only cars but many companies need to have vans in order to transport goods from one place to another. Vans may even come at a larger price tag than a car. In this case as well, vehicle leasing companies can be a rescuer with their wide range of vans coming in different sizes.
Different types of car leasing you can expect:
1. Business Contract Hire
A typical lease contract starts off with 3 payments in advance. This advance can go up to as much as 9 payments depending on the contract.
Lease timeframes are usually calculated in years like 3+20, 3+30, 3+40, etc. Considering the first choice, it means 3 payments in advance and remaining 20 throughout the contract.
Mileage is also a term in the contract which usually is 10,000 miles per year. Exceeding mileage mark will come with an excess charge added on contract expiry.
2. Business Finance Lease
A business finance lease is more flexible than the previous one. This contract suits companies that require vehicles to undergo excessive mileage, typically vans and the ones with refrigerators.
Business finance lease works more or less in the same way as a business contract hire. However, post contract period, a lessor can sell his/her vehicle to a third party.
This third party agrees to pay lessee an agreed amount, the vehicle gets sold, and the lessor gets released from his/her contract. Otherwise, the lessor can pay for extending the contract for a second term.
3. Business Operating Lease
Business operating lease, same as business contract hire, includes the road tax in the first year of contract. The lessor then has to pay the tax himself for the remaining contract.
Benefits of leasing cars for business:
1. Primary advantage of leasing cars is that the company does not have to make a massive investment to buy a fleet of cars or vans.
2. Leasing cars do not bind the lessor with any kind of risk. The leasing company bears all the damage and maintenance, taking care of everything else.
3. Contracts come with flexibility and may even depend upon the needs of the lessor.
4. At the end of contract, the lessee gets an option to return his/her vehicle. In some cases, the lessee may even buy the car from lessor at a certain market value.
5. Extending the contract may even come at a discount which can be an advantage for the lessor.
6. As the contracts last for a fixed amount of time, the lessor can enjoy an advantage of new vehicle upgrades and latest technology. Not just latest technology, but lessors can also enjoy improved fuel economy and safety with upgrades.
It is quite a popular choice to hire cars for business especially in the UK. Hence, companies looking out for vehicles can always opt for this economical option.
