No Deposit Car Leasing Deals – Why is it a Perfect Option for Businesses?
If you have a small startup and need a commercial vehicle for your business, rather than buying a car, leasing one can always be economical as well as flexible. But this is possible only when you are well informed about the available options because then you can customise the contract.
For a sole trader or new business, leasing a commercial car, such as a van, a pick-up or a specialised vehicle, is an extremely smart solution to drive a brand new car without needing to invest the entre upfront cost of the purchase price and drain your savings.
The money thus saved can be kept free for investing in your business and the regular payments are an easy to manage monthly expense.
How does Commercial Vehicle Lease Work?
On the whole, a leasing contract for a new commercial car typically begins with a deposit. The more the deposit, the less your monthly rent will be.
However, while it’s definitely a much lower amount to pay than paying the full cost of a brand-new vehicle, a deposit is still an amount of money that you have to pay before getting your new vehicle.
When starting your new business, every penny is important and therefore if you want to keep more and more money free, no deposit deals might be the best way to do this.
There is an increasing demand for flexible finance options in the commercial vehicle leasing industry. This means that it’s only obvious that you might think of the upfront deposit as a blockade to signing the contract.
Leasing Options for Commercial Vehicles
Business and Personal Contract Hire
Under this option, the car is hired at fixed monthly rentals, for a set duration of time and pre-determined mileage. Here you never own the car; therefore, as contract ends, the finance agency will collect it. You have to pay low monthly rentals and a low starting deposit as part of the contract which usually span from 24 to 60 months.
Business and Personal Contract Purchase
Here you can choose the car, contract length, deposit and the mileage. At the end of the contract, you can either purchase the car for an agreed lump sum or partly exchange the vehicle and use built-up equity as the deposit for a new vehicle or return the car to the lender. Here deposits and monthly rents are often very low.
Business Finance Lease
Under this option, the car is hired for a fixed monthly rental and a final rental (known as “balloon”) to cover the estimated residual value of the car at the end of the contract. Here you have to dispose of the car when contract ends.
Business Lease Purchase
Here the car is leased for a fixed per month payment with the alternative to buy it when contract ends. This needs a deposit, typically equivalent to 3 monthly payments and a last payment (often equivalent to the residual value of the car at the end of the contract).
Why is a Deposit Important?
Choosing between placing a deposit and placing no deposit on a new commercial automobile is about selecting to make your per month payments higher or lower – just as you would with a loan on a house. However, that doesn’t mean that no deposit deals will considerably increase your monthly payments either.
In the end, a lease deal can be affordable as you want it to be; however a no-deposit lease offers you the ability to drive a brand new medium van without needing to invest a big sum at the start and still monthly rentals are affordable to you.
In short, no-deposit deals will raise your per month payments, but not as much as you’d imagine. In short, it can be the best option for you when you have a small business that you’ve just started. So, go for it and enjoy having a car for your business without much burden on your pocket.