Whether you are starting your own business or expanding an already established one, you may want to give consideration to using a van. If you run a delivery business or need to transport goods and equipment to and from clients, then you’ll appreciate how useful a van can be. The thought of purchasing one, however, may be holding back your business expansion, due to the expense involved. There are other ways of using and having regular access to a vehicle other than owning it. Contract hire is one such way.

Buying vans outright is too expensive an option for most small businesses to contemplate; even spreading the cost over a number of months may be too much, because it would usually necessitate a loan, which many companies are unwilling to take out. And it may be that as a business owner, you are less interested in owning a vehicle than having full usage of a new vehicle.

Contract hire provides a simple solution to vehicle funding. It involves hiring cars or commercial vans, usually for a period of between 2 and 5 years, and is available to sole traders, partnerships and limited companies. It enables them to acquire their vehicles without the financial risk of depreciation on what would normally be a large capital outlay. This form of hire, therefore, allows the release of tied up capital for more beneficial use within the company, creating the optimum cash flow.

With contract hire, the initial outlay will be much lower than it would if you bought your vehicles outright; it is typically 3 months’ advanced rentals. This alone can save you a huge amount of money, which means you have capital to spend elsewhere in your business. Your monthly rental will also be low and because they are fixed for the entire contract period, you can budget much better for the whole year.

If you are a VAT-registered company you can also recover 100% of the VAT payable on the finance element of the rentals, where the vehicle is either a van or a car used solely for business purposes.

Not only do you save money with contract hire vans, you also portray a professional image to the outside world; your new or nearly new hire vehicles will be much more fuel-efficient and reliable than a van you’ve perhaps purchased and had for a long time. They will also look smarter, as you can change them regularly when each contract ends.

UKVF is a privately owned vehicle finance and vehicle sourcing company and we have over 15 years’ experience in the industry. For more information on contract hire vans or for a free quote, call us today on 01257 267 036.