Business car leasing or 'contract hire' refers to a long-term rental agreement providing the exclusive use of a car, van or light commercial vehicle (LCV) for a set period of time at a fixed monthly price, which often proves to be a cheaper funding solution than buying a new car or van with a bank loan or through dealer finance. Car lease deals help businesses of all sizes to avoid unexpected motoring costs, from sole traders, entrepreneurs and SMEs right up to nationwide fleets, charities and the public sector. We regularly publish advice articles to help businesses to understand contract hire, from why leasing a commercial vehicle removes any worries over residual values, to van leasing for startup businesses.
Advantages: 'Off' Balance Sheet Funding, tax relief for your business (please refer to your accountant), no worries about disposal at the end of the contract (subject to BVRLA Fair Wear and Tear Guide)
Disadvantages (see, we told you we're candid!): There is no ability for the business to purchase the vehicle, all car/van lease deals attract VAT, there is no prescribed formula for early settlement and each leasing company operate independently, potential de-hire charges for scratches and other damage.
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