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Van leasing 'cost effective for small firms'
Thursday 12 January 2012 Back to Blog
Van leasing presents an affordable option for companies that are wary of spending large sums of money during periods of economic uncertainty.
The current financial climate means many businesses are forced to consider ways in which they can reduce their expenditure and maximise profits.
This may mean scaling down fleet and transport costs by hiring vans rather than purchasing them outright.
Head of communications at the British Vehicle Rental and Leasing Association (BVRLA) Toby Poston described how many firms will be apprehensive to invest thousands of pounds on a van.
However, the majority are "confident enough" to rent a vehicle if they anticipate taking on new work.
"One of the key advantages of renting or leasing a van is the ability to fix costs," Mr Poston commented, adding this allows companies to spread their outgoings over a period of time.
"For a low monthly, weekly or daily payment - you get the use of a van for an agreed duration or mileage that suits your business," the expert explained.
As a result, it was suggested that vehicle leasing provides firms with the opportunity to free-up their cash flow and spend this money on other areas of the organisation.
The cash saved by renting a van rather than purchasing one can be used to invest in company growth or to pay back debts, Mr Poston noted.
Another positive side to leasing a vehicle is the potential discounts that businesses can receive, as a result of leasing firms negotiating deals with manufacturers, it was claimed.
According to Mr Poston, organisation that opt for van rental will not only see short-term benefits, but will also note financial advantages in the future.
He suggested leasing is a long-term investment as firms avoid several risks that are associated with vehicle ownership.
For example, the expert described how all cars and vas depreciate in value, which could see businesses facing a loss when they come to replace their four wheels.
It was noted that in recent months prices for used vans have fluctuated by up to 60 per cent, meaning the market is less than stable.
However, Mr Poston advised individuals that rental providers should "factor in some depreciation" with the cost of hiring the van, along with taking into account "the risk of large fluctuations in price".
Finally, the specialist commented that maintenance and servicing costs are accounted for by many companies when renting modes of transport.
Again, this may help firms to keep their costs low, as they do not have to fork out for expensive repairs.
Mr Poston said factoring potential maintenance into rental charges "protects the customer from any unforeseen rise in these costs".
Before driving away a leased vehicle, the BVRLA urges people to ensure they check the condition of the van or car with a member of the rental company in order to identify and record any existing damage.
Pointing out scratches on the bodywork or minor dents will help to prevent any disputes when the vehicle is later returned.