Van Leasing Vs Buying
What’s The Difference Between Buying and Leasing a Van?
In this guide, we cover the differences between buying your van outright and leasing your new van from Leasing Options, as well as the pros and cons of both options to help you choose the best way of securing a new van for your business.
What Are the Pros and Cons of Leasing a Van?
Leasing a van is very simple with Leasing Options, but what are the pros and cons of leasing?
Pros of Leasing a Van
New Van Every 3 years
Leasing has different term lengths ranging from two, three and four years, but in general you can renew your lease every three years and get a new van. Shorter and longer lease terms are available, fully tailored to you and your business needs.
Better Van for your Budget
Leasing means spreading the cost of the van over a lease term and only paying for the time you’re using it, instead of the whole van from the start, enabling you to obtain a higher spec or bigger van with your intended budget.
Cash flow in business is paramount, we don’t have to tell you that. Leasing requires an affordable initial payment and then manageable/predictable monthly costs.
Lower Repair Costs
As your van is new, there should be very little repair costs during your lease other than servicing, if you don’t take out our maintenance package with your lease.
Hassle Free Disposal
At the end of your lease, you hand the van back. There is no hassle with having to find a part-exchange value or having to sell your old van privately. We’ll be in touch six months before your lease ends to discuss your next van.
When you lease a van, you don’t have to worry about it depreciating in value. When you or your business own the van, as it ages, like most things it becomes less valuable. The number of miles covered, and any little chips or dents also affects the value. With leasing this is all taken into account, combined into one monthly fee (any damage outside of fair wear and tear is chargeable).
Lease Your Van in Five Simple Steps
Choosing the right van for you and your business is five simple steps away. This can be done via our website or if you need more help in choosing, speaking to one of our expert account managers.
Step 1 - Choose your Van
Use the inbuilt tools on our van leasing page to select and refine the body style and size of the van you require. You can even choose from a petrol/diesel engine or an electric van.
Step 2 - Get a quote
Fill in your details once you’ve found the van and deal which meets your needs, one of our account managers will then get in touch if you’ve submitted details via the web to discuss figures and draw up a quote, if you’re happy we can then apply for finance.
Step 3 - Apply for finance
If approved, you pay the finance company the monthly payments detailed in your quote. To get you approved, we need to check you or your business’s eligibility. Once the funder has run a credit check and given their approval, we can move to the next step.
Step 4 - Sign your contract
Make sure everything is correct and in place when you sign your contract. Once everything has been checked, the van is ordered. It is important to ensure that you fully understand the terms of the contract that you are entering.
Step 5 - Decide on a delivery date
Our deliveries team will be in touch once your van is ready to be delivered, they will arrange a time and place for you to accept your brand-new lease van.
Cons of Leasing a Van
A key aspect of a vehicle lease is the anticipated annual mileage – this is used to calculate your monthly payments. We will help you to work out how many miles you are likely to do; but things can change, and you might become even busier, meaning you need to travel more. Some funders will allow you to increase your mileage allowance, but this will increase your monthly payments. If you exceed the mileage allowance, you’ll need to pay the excess-mileage fee stated in your lease agreement.
Funders are looking for a good credit history, new businesses or those with a slightly poorer credit history may struggle or will be asked to provide additional documents to prove that they can meet the monthly payments throughout the course of the agreement.
If you buy a van instead of leasing one and need to and need to sell it, for whatever reason, you can just sell it at market value. If your lease van now doesn’t fit your needs and you need a new one, an early-termination fee will be payable to the funder.
Damage may cost you.
Leasing works on a “fair wear and tear” principle. When the lease ends, if the vehicle has damages outside of these guidelines you’ll need to pay for the damage. If you own the van, damage will only affect its value when you come to sell it. You should keep this in mind if your van is likely to see a lot of “heavy use”.
You must hand it back.
If you like to own things, leasing may be seen as a disadvantage at the end of your lease, as you need to hand the van back.
Sign writing and reversible modifications such as roof or ladder racks are allowed. Other non-reversible modifications that may be needed to make the van fully work for you and your business are not allowed.
What Are the Pros and Cons of Buying a Van?
Pros of Buying a Van
Or the businesses, but in theory you own it. You can do what you want with it, and all the care taken to look at will allow you to benefit from the value of the vehicle when you come to change and sell it.
No Monthly Payments
Working on the assumption you’re paid for the van in one lump sum and not financed it, then there will be no monthly payments to budget for.
No Mileage cap.
Use the van when and how ever you want, without worrying about going over your mileage allowance or breaching other terms of a lease agreement.
You can modify your van, to allow it to work fully for your business requirements
Cons of Buying a Van
Buying the van outright can cost a lot of money and impact the business’s cash flow, even the deposit for a hire-purchase agreement could be considerably less affordable than the initial payment for a lease. The reason for this is that you are required to pay the VAT element up-front, when purchasing a commercial vehicle.
The more you use the van and the older it gets; the value of your asset will continue to depreciate. This may mean that your total outlay would be a considerable amount more than a lease would cost you and your business.
You’ve kept your van in mint condition, but using it daily means it is still going to need maintenance and repairs the older it gets, compared to a newer leased van.
If you want to sell your purchased van when it’s time for a new one, you’ll either need to sell it privately or part exchange it, adding some extra hassle in obtaining your new van.
Why Lease a Van with Leasing Options?
Over 30 years’ experience in vehicle leasing, with a friendly and knowledgeable team of account managers able to help you choose the perfect van and lease term to suit your needs. Not to mention our 4.9/5-star score on trust pilot from over 7000 happy customers previously.