Contract Hire and Leasing Vans: An Overview
If you are a business owner looking to acquire a van for your company, you might want to consider contract hire or leasing. These two options allow you to use a van for a fixed period of time without having to purchase it outright. This can be a cost-effective way to obtain a vehicle for your business needs.
What is contract hire?
Contract hire is a rental agreement that allows you to use a van for a fixed period of time, typically between 24 and 60 months. You pay a fixed monthly fee for the use of the vehicle, and at the end of the contract, you simply return the van to the leasing company. The leasing company is responsible for the maintenance and servicing of the vehicle during the contract period, which can save you time and money.
Advantages of contract hire:
– Fixed, predictable monthly costs
– No need to worry about the resale value of the vehicle
– No need to worry about the cost of repairs and maintenance
– The ability to upgrade to a newer vehicle at the end of the contract period
Disadvantages of contract hire:
– You do not own the vehicle
– You may be charged for any damage to the van beyond normal wear and tear
– You may be charged for exceeding the agreed-upon mileage limit
What is leasing?
Leasing is similar to contract hire, but with one key difference: at the end of the lease period, you have the option to purchase the van at a predetermined price. Leasing agreements typically last between 24 and 60 months, and you pay a fixed monthly fee for the use of the vehicle. Like contract hire, the leasing company is responsible for maintenance and servicing during the lease period.
Advantages of leasing:
– Fixed, predictable monthly costs
– The option to purchase the vehicle at the end of the lease period
– No need to worry about the resale value of the vehicle
– No need to worry about the cost of repairs and maintenance
Disadvantages of leasing:
– You may be responsible for repairs and maintenance beyond normal wear and tear
– You may be charged for exceeding the agreed-upon mileage limit
– The cost of purchasing the vehicle at the end of the lease period may be higher than its current market value.
Which option is right for your business?
The decision between contract hire and leasing will depend on your specific business needs and circumstances. If you are looking for a short-term solution and do not want to worry about maintenance or resale value, contract hire may be the right choice for you. If you are looking for a longer-term solution and want the option to purchase the vehicle at the end of the lease period, leasing may be the better choice.
Regardless of which option you choose, it is essential to shop around and compare rates from different leasing companies to ensure that you are getting the best deal for your business. With a little bit of research and planning, contract hire or leasing can be a cost-effective way to acquire a van for your business needs.