On the fence between purchasing and leasing a vehicle for your business? You’re not alone. This is a common dilemma faced by many business owners as they weigh up the pros and cons of leasing versus purchasing their fridge van.
A fridge van can help you to expand your business and enter new markets. They’re useful for more than just food delivery and lots of business sectors can benefit from this niche type of vehicle.
Before you make a final decision, consider the following benefits of leasing a fridge van for your business.
1. Access new markets
Adding a fridge van to your fleet will enable you to reach new markets. This could mean expanding your business into new avenues, or it could mean expanding the potential reach of your business.
Without a fridge van, you might be limited in the distance you can transport goods. With a fridge van in your fleet, you can deliver goods even further, and ensure that they remain in a temperature controlled environment the whole time.
2. Lower upfront costs
When you choose to lease a vehicle over purchasing a vehicle, you’ll be able to save money on the upfront costs. A quality fridge van could cost in excess of £50,000 but you won’t need to shell out all of this upfront if you choose a lease agreement.
For the lease agreement, you’ll pay a deposit that is usually a percentage of the value of the vehicle. The larger the deposit, the smaller your monthly repayments will be.
3. Affordable monthly payments
Leasing a fridge van for your business means that you’ll have predictable and affordable monthly payments for your van. Knowing exactly how much you will have to pay each month can help with cash flow forecasting, which could help you to secure financing for your business.
Without a van lease, you could be liable for monthly maintenance costs which can be very unpredictable, particularly if something goes wrong. This can place your business as risk if you are unable to keep up with unexpected payments.
4. Flexible terms
One of the perks of choosing a lease vehicle is that the terms are often very flexible to your needs. You can save money in the long-term by choosing a higher deposit and leasing for a shorter period. This will result in higher monthly repayments, but a lower cost overall.
You can also reduce your monthly outgoings by selecting a larger deposit combined with a longer lease term. Leasing is essentially like taking out a loan, so the longer you require credit and the more you borrow, the more expensive it will become.
5. Option to own at the end
Leasing doesn’t have to mean that you never own the vehicle. With a hire purchase agreement, you can have the option to purchase the vehicle at the end of the lease period.
This is a great way to spread the cost of your purchase while also enjoying an extended try before you buy period. This can help you to determine if the vehicle is right for your needs. If your business changes in the duration of your lease agreement, you can always switch to a more suitable vehicle at the end of your lease agreement rather than making the final purchase instalment.
6. Access to modern vehicles
When you choose to lease a vehicle rather than purchase, you’ll often be able to choose a much more modern vehicle. This could include an all-electric vehicle which could help to drive down your operational costs. A great example of this is lower running costs when using an all-electric vehicle and also avoiding the ULEZ charge.
A brand new vehicle will also be less likely to break down, offering greater reliability. If you purchase a vehicle, you’re more likely to have to buy used. This could mean less choice and more compromises on the things that are important to you.
7. Tax benefits
There are savings to be found when you choose a lease vehicle, provided you do your research and confirm your status with your tax advisor before you move forward. There are various tax benefits available for companies leasing vehicles, so it’s worth doing your research to make sure you’re making the most of these opportunities.
8. Wider range of choice
If you have very specific requirements for your vehicle, you can benefit from choosing leasing over purchasing. With leasing, there are far fewer compromises to be made, so you can choose the vehicle that is right for your company right now, rather than feeling pressured into choosing one that your company can “grow into”.
You’ll have access to a wide range of modern fridge vans with all of the mod cons you need to keep your drivers safe. They are also equipped with added perks such as backup power sources for your refrigeration unit so you never suffer a power failure if the vehicle is left overnight.
9. No depreciation worries
When you lease a vehicle rather than buying it, you don’t have to worry about the impact of depreciation on the value of your asset. When you own the vehicle, it will be worth less and less each year. While you do have the option to sell at any time and recoup some of your investment, this possibility reduces over time. And if you’ve purchased a used vehicle, you can expect the vehicle to depreciate at a much faster rate.
10. Upgrade every few years
If your company image is important to you, being seen in the latest vehicle will surely benefit you greatly. By choosing a lease vehicle, you have the option to upgrade your vehicle every couple of years so that you’re always in the latest model.
This can be a huge source of pride for some business owners who want their competitors to know that they are doing well. Through leasing, you can access the latest vehicles as soon as they come out, so your drivers will never be seen driving an out-of-date vehicle.
