Has your business reached the point where you need a dedicated business vehicle? One of the important decisions you have to make is whether to buy or lease a vehicle. Many factors must be considered before a choice is made; the size of the business, cash-flow, type of vehicle needed, and whether you need one vehicle or a fleet. We have prepared a list of the pros and cons for buying and leasing or contract hire.
Pros Of Buying
If you choose to purchase a company vehicle you can choose any make and model you want, you can also choose to buy brand new or second hand. Owning the vehicle allows you to ad decal and other customisations such as having the company logo and contact information airbrushed on or having the vehicle wrapped. There are also advantages for tax. You May be eligible to take a deduction for the sales tax on the vehicle, or have some of the purchase written off as a business expense.
Cons Of Buying
Once you purchase a new vehicle its value begins to decrease. With extensive driving and if the vehicle is involved in an accident the value will decline further. Another con of purchasing a company vehicle is the payment. A huge lump sum to be paid at once, but this may not be viable for everyone.
Pros Of Contract Hire
When leasing a commercial company vehicle you will have a more reliable budget and all of your repairs and maintenance needs are taken care of. The monthly payments also have tax advantages. When leasing, you will have more options to match your needs. If you have a small business and aim to build your business then Contract hire may be the best option for you.
Cons Of Contract Hire
When you lease a vehicle you may not be able to get the exact make and model you want. If you decide you would prefer a different vehicle before your current lease is up, your options may be limited.
What Is Contract Hire?
Contract Hire or leasing, will allow you to drive a new vehicle over an agreed period of time and or mileage. This presents a cost effective method to use new vehicles without the drop in value which is typically associated with owning the vehicle outright. Contract Hire allows you to budget precisely for all of your business motoring needs with the option of vehicle servicing and maintenance. Once the terms of the contract have been reached you have the option to return the vehicle to the leasing company or get an extension on the lease agreement. There is no option to buy the vehicle and it has to be returned in a condition that meets the leasing company’s expectations. If you choose Contract Hire you can get flexible contract terms, low monthly repayments, better cash flow management, and VAT benefits. Dennehy Commercials offer both long and short contracts and a wide range of small, medium or large Vans, Curtainside, Fridge, Box Body, and Tractor Unit Trucks.Once the agreement has been finalised Dennehy Commercials provide; 24/7 support, a dedicated operation manager to help you control your activity and costs, legal compliance, and maintenance. Contact Dennehy Commercials today for more information on Contract Hire