Commercial vehicles are indispensable to the way the modern world works. Supply chains, the construction industry, and a number of other essential businesses couldn’t function without them. Unfortunately, the high initial cost and maintenance bills make them a significant investment for companies. This is where solutions like asset financing come in.
How Asset Financing Works
You can choose to lease the vehicle on a monthly fee determined by aspects like the expected mileage, how long you need the vehicle, and the funding costs. The value of the vehicle at the time of hire and its expected value at the end of the contract will also be taken into account.
Many asset finance providers also offer purchase options which involve making the same regular monthly payments, but with the view aim for you to own the eventually own the vehicle at the end of the contract.
How It Can Benefit You?
The benefit to asset financing solutions is that they provide an added flexibility to the way companies operate. They will allow you to better manage your company’s cash reserves as instead of shelling out large deposits you can work to a monthly contract that suits your business. This increased cashflow can be put to other uses such as investing in and strengthening other areas of your business.
An added benefit on renting vehicles is that the stress of vehicular maintenance can be provided on the financier’s side, and at the end of your contract you can decide to upgrade to the latest model. This will mean that not only do you not need to deal with the added stress that comes with obtaining viable insurance for commercial vehicles, but your company can always working with the latest and best vehicles available.
When leasing a vehicle for business use you’ll normally only be able to reclaim only 50% of the VAT back. This is because HMRC considers that there’ll be some private use of the vehicle. However, exceptions can be made and you can take advantage of the fact some companies offer 100% of the VAT reclaimable as it’s deemed to be sold exclusively through business use.
Buying commercial-grade vehicles outright is costly so this makes them well suited to asset financing companies. They can offer solutions in anything from a single, white, transit van to a fleet of heavy goods vehicles from a range of top manufacturers. Next time your business is looking to invest in a new vehicle or upgrade a current model, make sure you consider your asset financing options.