Business Bytes

Some companies will always choose to purchase their company cars, but many have seen the benefits of leasing their vehicles. Here we look at the basics of business car leasing and how to get the best value for money for your business.

 A number of companies exist that will search the marketplace on behalf of a business in order to find the best value cars available for leasing. A search of the internet will reveal a large number of brokers offering car leasing deals on a very wide range of makes and models. These brokers will be able to seek out any special offers that are available, so if you are considering leasing, it pays to seek out a specialist broker.

Car leasing to businesses, partnerships and sole traders is known in the United Kingdom as Business Contract Hire.

Key considerations when leasing a vehicle, besides the basic monthly rental amount, include the amount of deposit required and the administration fees.

Cars are usually leased for between two and five years, with a four year term being common. The finance company owns the vehicle, and is likely to ask for three or six months worth of payments to be paid as a deposit, followed by further monthly payments for the rest of the lease period at the standard monthly lease price. The structure of the payments is known as the payment profile.

The monthly payment is guaranteed not to change during the term of the contract. Cars are typically leased to companies at around 20% less than the cost to personal users because VAT-registered businesses can enjoy tax advantages.

At the end of the lease term, the finance company is likely to sell the vehicle, unless the company it has been leased to opts to purchase it at market value.

The following choices are likely to be available to those leasing cars:

•  Gearbox type – manual or automatic
•  Fuel type – diesel, petrol, electric and hybrid cars are available
•  Type of insurance
•  Level of carbon dioxide emissions – some businesses may want to select a car with emissions below a certain level.

Be sure to check the mileage allowance under the contract, and the flexibility for changing this should your intentions regarding usage of the car alter. A car may be offered for lease with an allowance of, say, 5,000 or 10,000 miles per annum. There are penalty fees if this amount is exceeded, but conversely if you choose too high a mileage allowance, you are paying extra for something you don’t need, so this is a key decision.

Specialist car leasing companies are also likely to be able to advise you as to which are the most reliable or efficient vehicles, and even as to how the type of car you select can affect employee retention rates.

Many businesses are wary of leasing vehicles, and many have a mindset that purchasing is best. But leasing may work out cheaper than purchasing when you compare the lease payments with the monthly repayments on a car loan. Lease payments are also fixed, giving you added security when compared to a loan repayment agreement where the payments can vary. Leasing also removes the need to carry out expensive maintenance on older vehicles, and worries over purchasing replacement vehicles and depreciation.

 You are also likely to find that cars obtained by lease come with free delivery and road tax paid, and with warranty and roadside assistance included, with an option to include maintenance. Also getting a new car via lease removes the need to worry about MOT tests and similar.

The UK trade body for the car leasing sector is known as the British Vehicle Rental and Leasing Association (BVRLA).

Cash, change, coppers in your pockets and wallets can be a real problem when heading towards town for a meeting or night out.

The technology of the 21st Century might change this hassle.

It means speedy transactions helped by contactless payments and mobile phones which act like credit and debit cards. A real step towards the future and a big change from the cheque era.

Payments technology has moved on slowly but surely. It is not sure which new technology will emerge as the outright winner.

A number of technological developments are already on the way for Ireland. Of course, there is the text and mobile banking service offered by Ulster Bank.

However, within a year from now contactless cards will be a daily routine. Stores and businesses will be equipped with the ultimate device as quickly as possible - it would be pointless having a high-tech card in your wallet if no one will accept it.

...With those cards, you will be able to pay for your triple-espresso in less than a second simply by holding it against a reader in the coffee shop. It will be enough simply to tap and go...

According to Lewis Nolan - vice-president at Visa Europe - there are already 15 million contactless cards in use in the United Kingdom.

The Irish system will work the same way as in  the UK. Each owner of that card will be able to spend up to 15 Euros at one time through the contactless technology. The 15 Euros limit is for security measure in case your card was stolen...good thoughts.

...It is possible for someone who has stolen your contactless debit card to go on a spending spree, but it would probably be short-lived and pretty unrewarding....

As a test, Ulster Bank has enlisted some of its staff to try a contactless card in the staff canteen in Dublin last year. Results are satisfying and the next step will be to roll out the cards to customers within a few months.

These news cards will be availlable with most savings accounts.

However, there is another new revolution behind these contactless cards. Ever heard of NFC (Near Field Communications). In other words, you will be able to pay by using your Smartphone. And according to some news the handsets will be on the shelves in time for the London 2012 Olympics.

Researchers are always thinking of "what's next".

...The next technological advancement that could become a reality in the coming years is person-to-person mobile payments...

So, a real revolution concerning our shopping habits is to come. Less is more we could say as moeny could disappear to leave us with the magic card or a mobile device for all transactions.

This could well be a great solution to reduce theft!?