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Minibus Leasing
Minibus leasing works differently to rental and short term hire and is a popular way for companies and organisations to have a minibus over a more long term period. Schools and colleges tend to rely on leasing a minibus as opposed to buying outright as it offers many benefits, some of which are unavailable when buying.
What is minibus leasing?
Leasing is a form of financial agreement that is used more regularly by businesses than individuals; there are different types of minibus leasing. The first is a finance lease and this works by the finance company from which you purchase the minibus charging the whole value of the vehicle and you pay back the interest and the full capital value over the term of the agreement; the agreements set in place will usually cover two to five years. At the end of the lease term the finance company will have received the money they need and a negotiation can be set in place for you to end the lease for a small fee, after which you own the vehicle.
Contract hire lease is the one more method widely used by businesses; this involves having the minibus in your possession but not paying back the full value of the vehicle over the term of lease. The lease company will hold back a portion of the value known as residual value. This form of lease will make overall monthly payments lower than that of a financial lease. An agreement is put in place (again, between two and five years) and upon the end of the agreement the minibus must be returned to the lease company. Once the minibus is returned the lease company can quote you a figure whereby you can pay off the residual value and own the minibus in full or set up a new lease on the same bus or a different, newer vehicle. Both options have benefits, re-leasing the same vehicle can be done for a much lower monthly repayment and having a brand new vehicle will give you a modern and lower mileage vehicle.
Leasing Benefits
The reason that minibus leasing is popular with businesses and schools is because of the numerous benefits that come within the agreement, these are benefits that aren`t available when buying a minibus outright. The first and large benefit is that is allows the person leasing to return the minibus every three years and lease a brand new vehicle, this means constantly having the latest and best models on the market.
Minibus leasing means that all maintenance and repair costs are included in the monthly repayments, MOT costs will also be taken care of. Roadside assistance is something that will need to be purchased if the vehicle is a bought one, with leasing this is included. Estimated mileage which affects the value of the minibus at the end of lease can be changed during the agreement. Another positive is the fact that you are not tied down when leasing, termination can be negotiated at any time during the agreement.
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