Van leasing for business purpose
When thinking of a business finance lease, you should consider it as a rental agreement
, which offers you lower taxes, especially if you have already registered your business to VAT. By using van leasing you will acquire your van faster and with far lower tax rates, than if you normally buy a van for your business. Moreover you will use it only for few years, and then you could get a new one, or sell the already used one, which is a great deal.
Depending on the style of financial contracting and the lease, you could find yourself with reduced monthly rentals, which will lower your outcomes even further. That could happen, if the release value of the van has been taken into account, when the financial outcomes are calculated. It normally depends on the agreements on which you have agreed, and if you have made the right deal, then you would have very reduced rental payments. At the end of the contract and the usage time you must either sell the van to other person, renew it for a further cost, or else keep it for a further period of time, which will also cost you more, than it normally would. So your best option normally is to sell the van, but it depends on the leasing company.
When you have your van leased you could have your VAT reclaimed by the rentals, depending on the capital element and the contract, and the agreement with the leasing company itself. Normally it is based only on 50% of the VAT, but in some cases it gets up to 75% or 100%, so you must choose the leasing company with which to make the contract, very carefully.
You should also be aware that you could gain money after selling the van, but you could also end up having to cover the potential costs differences, so you should be careful when selling the vehicle and choosing whom to sell it to.
So the best things to remember when you are going to lease a van for your business is that firstly you got to make sure that the contract fits perfectly to your requirements, then to make sure that the offer you have selected could provide you with a tax refund, and VAT reclaim, because after all, van leasing is better than normal van buying, because you could end up with 100% of your VAT reclaimed. Then once the contract is over you normally have a few options, but it also depends on the inked and signed contract, so you should read and check very carefully the agreements before signing them first. The best option you have is to sell the vehicle, but then you should be careful, both for the selling price and the person you are selling the van to, because you could both end up getting a profit, and having to pay the leasing company.
Van leasing for business purpose
By: Albert Wessel
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