What types of lease are available?
There are different types of leasing, each with their own benefits.With short-term lease you lease a car for a short period of time, often as little as one month. This is ideal if you need temporary transport or want to stay flexible. With operational lease the leasing company remains the owner of the car and costs such as maintenance, insurance and roadside assistance are included in one fixed monthly amount.
With financial lease you become an economic owner yourself and pay off the car in installments, which can be interesting if you ultimately want to keep the car. Finally, there is private lease, intended for individuals who want to drive carefree for a fixed monthly fee without unexpected costs. For more information, please read on.
Private lease
If you don't have a problem using the car for both business and home use and don't have to travel a lot of business miles, Private Lease may be the best option for you. In the case of a private lease, you conclude a private contract with VWP Shortlease as an individual. After concluding a private lease contract, you pay a fixed amount per month. This amount includes all costs for:
- Insurance
- Road tax
- Breakdown help
- Maintenance and repairs
- Tyre replacement
The lease car remains in the name of the landlord, so you cannot list the car on your own balance sheet. The business kilometers you drive are deductible at 19 cents per kilometer. For this deductibility, you must keep a trip record to be accountable to the tax authorities. After the end of the contract, you return the car to VWP Shortlease.
Short lease
The private lease contract often has a duration of 24 months. However, it is also possible to take out a shorter contract period, what we call short lease. With short lease you are more flexible because you have the option to cancel the contract weekly, depending on the duration of the short lease agreement concluded.
Financial lease
In the world of business leasing, there are two forms, financial lease and operational lease. Financial leasing comes in handy when you don't have sufficient financial resources to finance the purchase price of a car for your company. With a financial lease, the leasing company provides a loan for the purchase of the car, which you then repay through your company. You become the economic owner of the car and can include it in your business balance sheet.
In addition to repayment, financial leasing also includes maintenance, road tax and insurance costs. In addition, you must take into account the depreciation of the car at the end of the contract. When the lease contract expires, you not only own the car economically, but also legally, so you are free to do what you want with it, as opposed to operational leasing.
Operational lease
This is also a business lease option. Unlike financial leasing, the car remains the property of the leasing company during the contract. As a result, you cannot include the car in your balance. After the lease contract expires, you have the choice to return, purchase or renew the car. With operational leasing, you pay a fixed monthly amount, which then takes care of all things. The only additional costs you have are fuel costs.
What are the differences?
First of all, you have to make a choice between private lease or business lease. If the car is primarily intended for private use and you drive few business miles, private leasing is the best option. If you don't want to be bound by a long-term contract, you can opt for a short lease. Want to know more about how short leasing compares to other types of lease? Then take a look at the following pages:
- What is the difference between short lease and car rental?
- What is the difference between short lease and regular car lease?
- What is the difference between short lease and private lease?
- What is the difference between short lease and financial lease?
- What is the difference between short lease and operational lease?
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