Leasing a van entails entering into a rental contract for an extended period of time that grants the lessee the right to use a van or pick-up truck for a predetermined amount of time. An initial rental payment is made by the customer at the beginning of a contract, followed by a series of monthly payments for a period of 2, 3, or 4 years, depending on the length of the agreement. The customer is free to lease or buy another vehicle when the contract for the van has expired and the van is returned to the supplier of the financing without any further responsibilities being incurred by the customer.
Van leasing has become increasingly popular over the past few years with single traders, partnerships, and limited companies because it provides an effective, and often more affordable, funding solution compared to bank loans or dealer financing. When entering into an agreement for the leasing of a van, the customer does not need to be concerned about selling or depreciating the vehicle because the duty for these activities falls with the financier.
What kind of insurance coverage am I going to need for my leased van?
When leasing a van in Glasgow, for example, you are required to have fully comprehensive insurance for any vehicle that was acquired using financing (a protracted van lease on any credit agreement, for instance). Your financing business will not be willing to work with you if you just have protection against theft and fire for third parties.
The purpose of having fully comprehensive van leasing insurance is to cover both you and the financing company that is supporting your lease in the situation that there are unforeseen costs associated with an accident or incident.
Different Categories of Insurance for Commercial Vans
There are three distinct types of commercial van insurance, and the one that is ideal for your company will depend on the nature of your operations.
- Transporting of one’s own goods: This applies to enterprises, since it addresses the transportation of equipment and supplies that are essential to the operation of an enterprise or firm.
- Haulage: The term “haulage” refers to the truckers who transport items over large distances.
- Hired or reward transportation: This refers to couriers and other delivery drivers who convey the goods of other persons for a fee over shorter distances. If you have a sole trader or commercial van insurance coverage, rather than a private van insurance policy, you have the ability to use your vehicle for both business and personal purposes.
For the sake of protecting your means of subsistence, you should strongly consider acquiring additional coverage, such as insurance for your tools and the contents of your van.
How does Van Leasing work?
You might be able to apply for a commercial van leasing contract if you operate as a limited company, partnership, sole trader, or limited liability partnership (LLP). A business van leasing deal comes with a number of beneficial tax consequences, and corporate clients may also take advantage of exclusive extras, such as outsourced fleet management, that are made available to them. All business lease pricing exclude VAT.
A private person (as opposed to a business or company) is considered to be engaging in personal van leasing when they enter into a lease arrangement on a brand-new van or pick-up truck. People who have been turned down for vehicle financing in the past or who have been in business for less than a year can take advantage of this alternative funding solution. It is available to single proprietors, partnerships, and limited liability companies. In the case of a personal lease agreement, the private person who is taking out the lease agreement is the one who is approved for finance, as opposed to the company or business that is taking out the lease agreement.
We hope that any misconceptions concerning van leasing have been dispelled by this information. Van leasing in Glasgow and beyond is becoming an increasingly popular choice, despite the fact that it is not discussed as often as other forms of transportation. The fact that there are fixed monthly payments is highly enticing, as is the idea that you don’t have to worry about depreciation and that if you sell your vehicle on, any equity is yours to keep. Both of these aspects contribute to the overall attractiveness of the plan.
In addition, you can’t really disagree with the benefits that leasing a van might provide to a company, and the set tax rate that applies to company cars. We hope that you are now more knowledgeable about the ins and outs of van leasing.