Most SMEs rely on motorised vehicles for the smooth running of their business, and many of them choose to hire rather than buy.
For the average SME, it’s not always financially practical to own a full fleet of vehicles, particularly for those which are seasonal. The pressure for company vehicles to positively represent the business means that keeping them current and in immaculate repair is costly but crucial and can cripple the bank balance of a small business.
To Buy or Not to Buy
Of course, some business owners simply desire the freedom to use their vehicles without the restrictions or limitations which may be imposed by lease hire companies regarding mileage limits or vehicle modifications. In which case, buying is the best option. However, according to the BVRLA, in 2016 there was a 16.2% increase in the number of van rentals, suggesting that leasing also offers some interesting incentives.
The primary benefit of leasing for most people is that you don’t require a lump sum of money upfront. Most leasing contracts require a small deposit and then spread the cost of the lease term over the period of the contract with payments on a monthly basis.
Other incentives to leasing, providing your vehicle is for sole business use, include being able to claim up to 100% back on your monthly VAT payments, and the fact that repair and maintenance costs are usually covered by the leasing company. Lease hire companies that offer van hire in Gloucester, such as https://www.fleetwayrentals.co.uk/, have a wide range of makes and models to chose from and usually ensure that their vehicles are in excellent repair at all times.
No Right or Wrong
According to Simply Business, buying brings you more freedom and the right to treat the vehicle as you wish – for example, to stamp your brand across the roof – whereas leasing brings you more flexibility and financial security, knowing that in quiet business periods you won’t have the added concern of the cost of running your vehicle.
There is no right or wrong answer about whether to buy or lease: what is right for one business may not be right for another. Each business must simply choose the option which best suits their needs.