Getting the best deal on leasing cars and vans

Elliot Woodhead, Director of SME & Partnerships at Arval, one of Europe’s largest vehicle leasing companies, explains how you could save hundreds by leasing.

The construction industry is one of the UK’s largest users of business vehicles. Strict purchasing and safety criteria typically apply when large construction companies purchase specialised heavy vehicles for the job.

However, the selection criteria for choosing more standard cars and vans are equally important. Travel is key for construction – for consultants, architects, engineers and surveyors as much as for site based contractors.

Many companies with spare cash choose to buy vans outright and run them down to the last mile. Some accountants will recommend this as a way of using up excess profit.

Or they allow employees to drive their own vehicles and reclaim mileage thinking this is cheaper than offering a company car.

Even if you only have one van or one car, leasing is a better option. Here’s why:

1. For most businesses, the monthly leasing cost is often cheaper than buying cars and vans outright, especially once you include all the running costs, even for only one vehicle. There are also tax benefits for the business.
2. The monthly rental means you can spread the cost of leasing and take the pressure off cash flow. There is also no upfront capital expenditure which releases funds for investment. Plus there is no depreciating asset eroding money on the balance sheet, as this chart shows.
3. Company cars and vans reduce risk to the business. It’s the employers’ responsibility to make sure all vehicles driven on company business are being used legally and are roadworthy, irrespective of ownership. Leasing can help to ensure drivers are always able to take advantage of the latest vehicle technology and by adding an optional maintenance package you get the peace of mind of knowing the vehicle will always be properly maintained. Insured leased vehicle option is available and will mean they are properly insured for business use too.
4. Leasing is a cost-effective option for businesses of all sizes. Personal leasing may offer the most tax and cost-efficient option for owner managers or consultants who manage their own finances.
5. Properly managing any vehicle can take a surprising amount of time. Keeping up to date with the paperwork, checking vehicle and driver data, all the maintenance and servicing, sorting out repairs if there is an accident, arranging new tyres plus all the road tax, MoT and other requirements. Leasing is an efficient and effective way of managing all of your vehicle needs.

 

RSL Surveyors, chartered building surveyors based in Paignton, has five full-time employees and operates serviced offices in Exeter and Wadebridge.

Director Simon French switched to leasing with Arval when he realised the cost-efficiencies it offers: “Nowadays I wouldn’t consider buying a vehicle, because I worked out I was saving around £130 a month switching to a lease through Arval.

“I took on board the depreciation and maintenance of my car and worked out how much I was actually spending a month. I then contacted Arval and discovered that it saved me money to lease the car rather than buying it outright, once I considered the whole life costs and the resale value after two years.

“It’s easy to forget that in two or three years I’ll change the tyres at least twice. It quickly adds up. Even with a new car, if something goes wrong that isn’t covered by the manufacturer, you’ve got to find the money to be able to fix it. For a lot of smaller businesses, if a car repair bill were to come in it’s hard to find a spare few hundred pounds to sort it out.

“Leasing gives you peace of mind. I know that if there’s a problem Arval is going to come along, put it in the garage and sort it out. I don’t even have to remember when to take in the car for a service or pay the tax, as I get an automatic reminder. With the hours that I work, that’s a godsend.”

Interested in leasing? Give us a call on 0800 8044572, email SMEDirect.enquiry@arval.co.uk or visit our website: www.arval.co.uk

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