What is Van leasing?
Van leasing is an option to get a van to drive without making a huge payment. Van leasing is similar to car leasing, but the difference is that car leasing companies offer cars to drive, And van leasing companies offer vans. Van leasing is a more desirable option for companies that require a fleet of vans to expand their business. That is the reason why van leasing UK trends among businesses. However, it is also true that an individual can also lease a van for his personal needs. Van leasing offers all facilities of ownership but for a limited time. It is when you pay a monthly rental for driving a van for a specific time, usually more than two years.
How does it work?
Though you may have heard the generic definition of van leasing, it offers you to drive a van at a very low cost, but do you know how it all works? Let’s tell you in this article how van leasing works and who are its beneficiaries.
The van leasing process begins with the selection of a van. When you select a van, an agreement is formulated to be signed between the lessor and the lessee. The agreement includes all the details and conditions of the leasing. It mainly includes the amount of upfront payment, monthly rent, and the contract time period.
Upfront payment:
For leasing a van, you have to first make an upfront payment. It cost lesser than the payment you do when buying a van. The amount for the upfront payment depends on the van’s depreciation, interest, mileage allowed, rental fees and taxes, and length of the lease.
Monthly rent:
Leasing a van does not end up with an initial payment. You will be asked to pay a certain amount of money monthly as the rent of the van to the lessor. The amount of the rent, like the upfront payment, depends on the depreciation, interest, rental charges, and tax. Though there are many to count they commutatively make a less amount.
Length of lease:
The contract also mentions the length of the lease, which is mostly fixed. You can lease a van for at least two years to three (or sometimes four) years according to different companies. However, you can also avail of shorty term van lease deals, if you want a van for a very little time -below two years.
Conditions for termination:
The termination of the lease can be from both sides with a few conditions. If the lessee wants to terminate the deal before the specific time, he will have to pay a cost for it. Usually, these costs are so much that the lessees rarely think of quitting a deal. The lessor, on the other hand, can also terminate a deal when it finds that a lessee is using it for an inappropriate purpose or has totally damaged it in an accident.
Penalty:
The penalities are also suggested in the contracts for a lessee who fails to return the van in a good condition. The penalties vary from the company to the company; however, they usually charge money for each damage in the van. Also, if a lessee fails to submit lease monthly payments, there are a few penalties like fines
Mileage:
Most van leasing companies restrict the lessors from crossing a certain annual mileage. In case a lessee crosses the limit, he will have to bear consequences in the shape of heavy fines. However, the vans that have been leased three times do not have a mileage restriction. So, anyone can take the advantage of that.
Van leasing is a very economical option to get a van to drive for personal and professional use. However, it is very essential to consider checking the contract before signing it to oversee all the terms and conditions.
