Deciding on the right vehicle for your business is always difficult – being able to decide what’s worth the cost and what’s not. The same goes for deciding between buying a vehicle outright or leasing a vehicle; everyone wants to know which one will benefit their business the most. In reality, this depends on you and your business but let us help you consider the benefits of contract vehicle hire for your business, whether you need a single vehicle, or a fleet of vans.
- Monthly payments are lower than loan payments or ‘hire purchase’ due to neither having to pay interest on top of the monthly payments, nor making monthly payments till you own the vehicle – with contract hire, you pay a set amount each month and once the contract is up you give the vehicle back, and either reconsider your options or choose your upgrade.
- Easier to obtain than a loan, even with bad credit rating – therefore, it’s easier to contract hire, than go through the process of taking out a loan to buy a vehicle outright.
- Maintenance costs are low because the rental company usually includes maintenance costs and servicing in the monthly price. Also, you will usually be given an alternative vehicle when yours is in for maintenance so there’s no business down-time.
- No depreciation concerns. Your business does not own the vehicle, therefore there is no need to worry about arranging or negotiating to sell the vehicle. Once your contract has finished you can return the vehicle to the rental company, and arrange a new contract when a brand-new vehicle is required.
- Can be used for long-term van hire.
- Maintenance costs will increase over time and can include costly repair bills. You may also not be able to trade without a van so will need to find a costly urgent replacement.
- Vehicles depreciate in value quickly – meaning you most likely won’t be able to sell the vehicle for as much as you paid for it.
- Monthly payments are initially higher than leasing – when you own the car, you take full responsibility for all costs e.g. insurance, maintenance costs and servicing. Whereas, when you hire a vehicle, most companies will include these costs in the monthly price, meaning you pay the same amount every time.
- The initial payment can be huge, making a big dent in your business’ bank balance.
- If you’re buying a used vehicle from a non-reputable dealer or buying privately, there can be uncertainty about the vehicle’s history, meaning if any issues arise with the vehicle you have no one to ask or blame apart from yourself.
In conclusion, it can often be more beneficial financially and time-wise to opt for commercial van hire instead of paying out for a business vehicle. Choose the right contract vehicle hire company and you’ll get the best of both worlds.