THE ADVANTAGES OF LEASING YOUR QUESTIONS ANSWERED
In the United Kingdom a very large number of businesses choose to lease equipment because of the advantages leasing offers:
Protects Working Capital
Equipment bought outright means that the cash you have invested becomes tied up in a depreciating asset and cannot be used for other purposes. Leasing the items of equipment you need enables you to save your cash resources for other purposes including repayment of bank loans, slow payment by your customers and unexpected problems.
Protects Existing Bank Borrowing Facilities
When you lease equipment existing credit facilities including bank facilities are not affected so that these remain for use if necessary in the future.
Better Budgeting
Lease payments are not effected by changes in interest rates so that unlike bank loans or bank overdrafts you can accurately budget for these payments for a fixed amount over a fixed period of usually two to five years. These payments are usually made by bank standing order or direct debit on the same date monthly or quarterly.
Tax
For businesses paying tax leasing can be very attractive. Leasing payments including VAT may be deducted from taxable profits, which of course reduces the net cost of leasing the equipment.
Low Initial Outlay
Most lease agreements either stipulate for three months rentals in advance or do not require an initial payment. In the latter case you simply make regular payments throughout the life of the agreement.
WHAT IS THE COST OF LEASING THE i-m4?
Option 1 - Capital Cost: £1,531.06 + VAT
| Term |
2 Years |
| Profile |
1 + 23 + 1 |
| Advance (1 Month) |
£75.76 + VAT |
| Followed by (23 Months) |
£75.76 + VAT Per Month |
| Final Payment (1 Month) |
£75.76 + VAT |
| Total Cost |
£1,894.00 + VAT |
| Monthly Cost |
£75.76 + VAT |
Option 2 - Capital Cost: £1,531.06 + VAT
| Term |
3 Years
|
| Profile |
1 + 35 + 1 |
| Advance (1 Month) |
£54.89 + VAT |
| Followed by (35 Months) |
£54.89 + VAT Per Month |
| Final Payment (1 Month) |
£54.89 + VAT |
| Total Cost |
£2,030.93 + VAT |
| Monthly Cost |
£54.89 + VAT |
RENTAL INCOME POTENTIAL FROM 1 i-m4
30 Weeks (214 days) from 1 st April to 31 st October
2 rentals per day (428 Rounds) @ £10.00 per Round = £4,280.00
1 rental per day (214 Rounds) @ £10.00 per Round = £2,140.00
5 rentals per week (150 Rounds) @ £10.00 per Round = £1,500.00
Conclusion
It is realistic to expect to hire out the i-m4 once a day and based on the figures above the total buggy outlay is paid for in the first year. Therefore all further rental income is pure profit.
By running a fleet of i-m4 buggies the rental income potential is vast.
The above repayments are approximate and Leasing Agreements are subject to status and confirmation |
