| By :
Dirik Hameed
Today, one of the most popular options for businesses is van and car lease. Businesses choose this because it is one of the most cost efficient ways to manage transportation. The company leases the vehicle for a period of time, then returns the vehicle. It is then replaced with a newer model and a new contract. This is a wonderful asset. This way the business has the latest model, but not the burdens of car ownership. Businesses that offer services like catering, carpeting, or carpentry might choose van leasing. This accommodates the transportation of tools. In addition, this is a great option for businesses with delivery service. A service business, or one with delivery service, can get into trouble if the vehicle breaks down. They must pay for costly repairs. They also incur additional costs of business lost. Those that lease a van can simply call the leasing company. They will be responsible for promptly replacing and/or repairing the vehicle. Today, vehicle repairs are very expensive. Parts and labor must both be considerations. This is not everything. A leased vehicle can be traded in every 2-3 years. Car technology is advancing and the newer models break down less frequently than the older ones. Another choice is car leasing. A business with a large corporate staff may consider this choice. Large corporations offer cars to personnel as a perk. Many cities have transportation services for airports. Car rental is not something people who have just landed want to deal with. These people opt for this type of service. It is much cheaper to lease these cars than purchase them. The biggest reason is the leasing company must take care of repairs. To lease a car, individuals must first become informed about the process. Not everyone understands this process. It is quite simple. An important aspect is it is not the same as renting a car. If individuals do not understand the process they should not lease. The first step is to research the process. The second step is to thoroughly research the car for lease companies. Make sure to understand both the terms of the car and leasing agreement. This way the consumer will get the best deal possible. It is important to understand the main concept of vehicle leasing. The amount the vehicle depreciates during the contract determines how much is paid. The value of the car at the beginning of the lease less the value at lease end is the depreciation. This is called residual value. This means the business leasing the vehicle is not paying to own something that is depreciating in value. Another reason businesses choose leasing is the lease end options. There is a choice of trading the car for a newer model. Sometimes the lessee can purchase the vehicle or walk away. When purchasing a vehicle out right, these options are not available. These are offered in the case of closed-end leases. Most of the time open-end leases are for businesses. An open-end lease means the business will incur an additional charge if the vehicle depreciated more than expected. Usually, the amount of a monthly payment for leasing is 1/3 less than that of a loan payment for purchasing. It is usually much easier to get approval for a lease than it is for a loan.
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