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Van Business Finance Lease

Finance Lease is a very popular van leasing product with many of our customers. It offers the benefits of ownership because you can take advantage of equity build up in the vehicle via a leasing product with a low initial rental up front. VAT is only charged on the initial rental, monthly rentals and final rental, not the initial cost of the vehicle.

The vehicle is hired for a fixed monthly rental with a final rental (balloon) covering the estimated residual value of the vehicle at the end of the contract. You are responsible for disposing of the vehicle at the end of the contract. If the sale price is above the predetermined final rental (balloon) you will retain the equity, less a small charge from the leasing company. If the sale price is less than the final rental (balloon) then you will be liable to cover the shortfall. The final rental is calculated using the expected mileage in the vehicle over the contract.

With Finance Lease you may be able to finance up to 100% of the cost of a vehicle, minimising any initial rental or capital expenditure on your behalf. You can agree the periodic rentals to be paid in return for the vehicle and, at the end of the term, you have the option to rent the vehicle for a nominal sum (known as a peppercorn rental) or to sell it and retain most of the proceeds. Your cash flow will be eased as VAT is payable on the rentals only, not the cost of the asset.


  • Fixed monthly rentals
  • Choice of contract period from 24 to 60 months
  • Monthly rentals are up to 100% tax deductible
  • Potential to carry on using the vehicle at the end of the primary lease period
  • Additional line of finance that may not affect core banking arrangements
  • No strict mileage or damage penalties (please note that excess mileage and damage to the vehicle will affect its value at the end of your contract)
  • Monthly rentals can be lowered further through the introduction of a final rental at the end of the contract. This can be set at a value equivalent to a forecasted residual value or reduced in line with anticipated wear and tear on the used value
  • Available option to re-finance the balloon payment over a longer period of time
  • No need to be VAT registered
  • You retain the majority of the equity built up in the vehicle over the contract
  • Ability to settle the agreement early


  • Risk of fluctuations in the used vehicle market which could be a problem if you have opted for a balloon payment and the value of your vehicle is less than this.
  • Monthly rentals appear as a liability on balance sheet
  • There are operating risks associated with running the vehicle i.e Maintenance and servicing costs cannot be included
  • Risk of negative equity if settled too early clear
  • You cannot own the vehicle

This would suit customers who:

Want the flexibility of multiple options at the end of the contract.

Want to build up equity over the contract without taking ownership.

Do not want to be tied to a contract which penalises them for vehicle damage or excess mileage.

Are not VAT registered because VAT is paid on rentals rather than all upfront.

Van Leasing - Finance Lease FAQs

Please just click on a question to reveal the answer.

Van Leasing - Finance Lease

What are the advantages of Van Leasing?

There are many advantages to Van Leasing for your business. To name a few, these are improved cash flow, fixed and competitive monthly rentals, low deposit, tax relief, no strict mileage restrictions and the ability to build up equity in your new vehicle.

What are the disadvantages of Van Leasing?
  • Monthly rentals appear as a liability on your balance sheet
  • Risk of fluctuations in the used vehicle market
Why would I use Van Leasing instead of Contract Hire or Contract Purchase?

Van Leasing provides you with options at the end of the term that you don't get with other leasing products. It is particularly useful if, for instance, you cannot accurately predict the mileage you're likely to be doing in your new van.

It's also a very good option if you are planning on using the van for work that could have a detrimental impact on its condition at the end of the contract. So if you're a builder, or in a related trade, using your van to pick up materials and go on-site all day, then this may be best way to buy your new van.

Contract Hire is a bit more restrictive. For example, in most cases you only have one option at the end of the contract, which is to hand it back. In this case, you would then face an excess mileage charge and potentially a costly repair bill. So Finance Lease gives you more control.

It also means that you have more options at the end of the agreement:

  • Re-finance the initial payment at the end of the term, over a further 6 months to 5 years (depending on the length of the original contract).
  • Sell the vehicle privately, retaining the equity made after clearing the balloon payment.
  • Part exchange your vehicle at any time during the lease, looking to clear the balloon payment and retaining any equity that is left afterwards

Van Leasing provides a more flexible lease, enabling you to request an early settlement at any point during the contract. However, we recommend not settling too early, as the depreciation curve is always steeper in the first half of the agreement than in the second. Depending on the size of the initial deposit, if you settle too early, the amount required may be more than the vehicle is worth, which could result in negative equity. The size of the discounts you enjoy when buying from us will mitigate some of this, but it does still needs to be considered. This differs to Contract Hire, which can penalise you for an early termination with finance companies charging you up to 50% of outstanding monthly rentals.

It provides you with all the Tax and VAT benefits that leasing provides and the VAT is spread across the contract rather than needing to pay the VAT all up front like a Contract Purchase.

Overall, Van Leasing puts you in control throughout the contract giving you ownership of the equity built up in the lease and the flexibility and peace of mind at the end of the term.

How much does Van Leasing cost overall compared with buying a vehicle outright?

Your Van Lease, when taken through us, enables you to benefit from both dealer discount and the substantial manufacturer support we negotiate directly with the manufacturers on your behalf. With this combined support, the total repayments will be significantly more competitive than purchasing outright where you are more than likely receiving the dealer discount alone.

Can I keep my van at the end of the Van Leasing agreement?

You have a few options at the end of your Van Lease agreement. These are:

  • Re - finance the final rental.
  • Sell the van on privately and retain any equity made after clearing the final rental.
  • Part Exchange the van with ourselves and retain any equity after clearing the final rental.
  • Pay the final rental and enter a secondary period with a one-off yearly payment. This 'secondary rental' would be applicable if none of the options above are taken, as the vehicle remains registered to the finance company until the vehicle is sold or re-financed.
Do I have to be VAT registered to lease a van?

No, Van Leasing is available to you whether you are VAT registered or not. In fact, if you aren't VAT registered Van Leasing will be more beneficial than purchasing, due to the VAT being spread across the monthly rentals rather than being required up front. This keeps the initial deposit to a minimum and enables you to utilise your capital more effectively within the business.

Can I claim the VAT back on the Van Leasing monthly rentals?

If you are VAT registered, you have the ability to reclaim up to 100% of the VAT back. VAT is paid monthly and reclaimed quarterly in your VAT return. Should you become VAT registered during the contract you can begin to claim the VAT back from that date onwards.

What are the limitations on mileage?

The balloon payment at the end of the Van Lease is based on a residual value of the vehicle determined by the finance company. The residual value is calculated based on the term and approximate mileage, which you provide to us. However, there are no restrictions on the mileage with Van Leasing although should you do significantly higher mileage than you predict, this can result in the possibility of negative equity at the end of the term. Therefore, we encourage you to base the quote as close to your current mileage as you can to prevent the negative equity from occurring.

Do the CO2 emissions on my van affect anything?

No. The vehicle is classified as a Commercial Vehicle; therefore, it falls into 'Commercial' classification for both Road Tax and Company/Personal Tax.

Can I change my van mileage during the lease agreement?

No (See question 6). It is important to run the quote based on your current approximate mileage in order to have a realistic balloon payment at the end of the term, as this is based on a Residual Value of the vehicle. However, there is no excess mileage applicable on a Van Lease.

Can I extend the Van Leasing agreement?

In most cases yes. We are in touch with you around 3 months before the end of your Van Lease to go through the options with you. One of these options (See question 3) is to re-finance the final rental payment over a period of 6-48 months (depending on the original length of the contract), however, not all finance companies offer this.

What age do I need to be to take out a Van Lease deal?

Under the Consumer Credit Act, the minimum age to lease a new vehicle is 18 years old. All finance companies will also require a copy of your driving license.

What deposit do I require to order my new van?

One of the many benefits of Van Leasing is the low deposit. We can offer a full range of deposits for your Van Lease to suit your requirements. For example, we can offer nil deposit, 3, 6, 9 or 12 months in advance, or an enhanced deposit to work around you. The higher the deposit, the lower the monthly rentals become.


Do I have to have a credit check to get a Van Leasing deal?

Yes, we will require very simple information to go through the credit check in order to secure your new van.

How long does the credit check take?

We use a number of different finance companies with different underwriting criteria. We can receive the result of your credit check anywhere from under an hour or up to 24 hours after proposing.

What if I get turned down, will it affect future credit ratings?

Each credit check will leave a small 'footprint' on your credit profile, but this will not have a significant effect on your credit rating.

What can I do if I have bad credit history?

It really depends on how bad your credit history is. However, we use a number of different finance companies (Funders) and we will do everything we can in order to secure a new vehicle for you. Some of our Funders are more pragmatic with their approach to underwriting and are more understanding with certain credit history situations.

Which finance company do you use?

We use a wide range of finance companies, which enable us to offer you the most competitive prices in the UK, coupled with our discounts and support. The range of finance companies we use also offers us a full range of solutions and terms to meet your requirements.

What information do you need to set up a Van Leasing deal for me?

We require very simple information based on your company status. These are:

  • Name, 5 years address history, mobile and landline number
  • Company name (if any) or Company Registration Number if a Limited Company
  • Directors details
  • Bank details (sort code and account number)
  • Number of years trading


Do I own the van on Van Leasing?

No, when buying a van using Finance Lease you do not own it. However, whatever equity is in the vehicle at the end of the contract is yours.

Let's say, for instance, you have a balloon payment of £2500 at the end of the agreement and your van is worth £3500. The £1000 is yours less 2% of the sales proceeds, so in this case £70.

During the period of the agreement, the vehicle is on the finance company's books as an asset and leased to you. The 2% (or £20 for every £1k) charge is made by way of an administration fee. Although you could physically sell the vehicle, they would do the invoice and paperwork.

This way you get all the benefits of leasing, ie, a low deposit and low monthly rentals, which are all up to 100% tax allowable, as well as the ability to claim up to 100% of the VAT back. So bearing in mind that a van is a tool that allows you to operate your business, then this is probably the most important thing.

Can I sell the van at the end of the Van leasing agreement?

Yes (See question 3 under Van Leasing), you have the ability to either sell the van privately, or we can offer part exchange and would welcome the chance to purchase your van back from you. Should you be interested, and have been impressed enough with our level of service, we would love to supply you with a new vehicle in replacement.

Can I keep the van at the end of the Van Leasing agreement?

You cannot keep the vehicle at the end of the Finance Lease agreement. If there is a final rental that needs to be paid, you either repay that in one lump sum or, in most cases, the finance company will allow you to refinance it. If you still want to keep the van once any final rental payment is made then, as all of the Capital has been repaid, you would then enter into what is called a 'secondary rental period', i.e. a peppercorn rental. This is usually a yearly payment, however, not all finance companies offer this service. The vehicle remains registered to the finance company until the vehicle is sold or re-financed.

What is the Secondary Rental Period?

When you lease a van using Finance Lease, you have the right to the majority of the equity when the vehicle is disposed of. Because it is a lease agreement, you also have the benefit of being able to offset up to 100% of your monthly rentals against your taxable profits. However, if you want to carry on using the van after all of the payments have been made then you would pay the leasing company a nominal consideration of the equivalent of one monthly rental, or thereabouts, for each subsequent year you keep the vehicle or part thereof. This keeps it off your balance sheet and allows you full use of the vehicle, without putting at risk your ability to carry on offsetting your rentals against taxable profits.

Am I liable for parking tickets and speeding fines?

Yes, you are liable for all parking tickets and fines for the vehicle. All parking tickets are issued to you directly at the time rather than going through to the Funder, so it is best to deal with these as soon as you can to prevent additional charges. But all speeding fines are sent to the finance company, in the first instance, and they will pay the fine and forward the details onto you. Please be aware the finance company will charge an administration fee for dealing with speeding fines.

Who pays for new tyres, MOT, servicing if I am leasing the van?

You are solely responsible for the upkeep and maintenance of the vehicle according to the manufacturer's guidelines whilst the vehicle is in your possession. However, please remember that for peace of mind, the majority of manufacturers now offer a standard 3 years warranty to cover all malfunctions on manufacturer's components.

What happens if the van is in an accident during the Van Leasing agreement?

You will need to call your insurance company in the first instance, as they will require details of the accident. We can of course provide any help in communicating this to the finance company on your behalf and are happy to help wherever possible.

What happens if dents and scratches appear on the vehicle at the end of the agreement?

You are responsible for the vehicle on the Van Lease, so any dents or scratches can have a negative effect on the value of the van when either selling on or part exchanging at the end of the term. There are however no penalties issued by the finance company as you are in control at the end.

Can I customise the van, ie tint windows or lower it?

Yes, although we would recommend contacting us in the first instance so we can confirm this with the finance company. However, we would strongly recommend not pursuing anything that might have a negative effect on the value of the van at the end of the term.

Can I take my van abroad during the Van Leasing period?

Absolutely, a simple call to the finance company will enable you to get a copy of the registration document to prevent any issues when travelling abroad.

Can I race the vehicle?

No, the finance company will not allow the vehicles under any circumstances to be involved in racing.

Van Insurance

Is my insurance going to go up because I lease my new van?

There is no reason why your insurance will increase. Van Leasing is becoming more popular; therefore, the majority of insurance companies can provide very competitive quotes to insure your new van. We can recommend insurance companies who we know are competitive in the market place, just click on this link for further details: Van Insurance

Is insurance included in the Van Leasing agreement?

No, you are responsible for insuring the vehicle on a Fully Comprehensive policy for the duration of the contract.

Can I insure the van under my company insurance?

Yes, absolutely. The insurance must be in the name of the applicant though, whether this is your name, trading name or your Limited company.

Is Fully Comprehensive insurance compulsory when leasing a van?

Yes, (See question 2 under Van insurance) your van must have Fully Comprehensive Insurance for the full duration of the contract.

Can I insure my whole family to drive the van?

Yes, if your policy allows it, then there is no reason why you are not able to add additional drivers to your insurance.

Can I include insurance in the Van Leasing package?

No (See question 2 under Van Insurance), you are responsible for insuring the van during the contract.

If I am in a crash or have an accident, do you provide a courtesy van?

This is normally something that is covered by your insurance company. You may be charged a premium for adding this. However, please check when arranging the policy if this is something they can cover you for.

My New Van

Do I have to pay for delivery?

No, we offer delivery anywhere in the UK at no cost to our customers. Please note that fully qualified delivery drivers drive the vehicles.

Can I choose different colours; if so is there a cost?

Absolutely, you have the ability to choose the colour of your new van. Some colours will attract an extra cost; these are normally either metallic colours or special edition colours.

Do I have to pay for Road Tax when leasing a van?

You receive your first 12 months Road Tax with your new van. On a Van Finance Lease, the finance company tax the vehicle every year thereafter for you and recharge the cost of the road fund licence back to you. Please note that some finance companies will charge an admin fee for this service.

What happens if I wish to transfer my private number plate?

We do not charge any administration fees unlike many of our competitors. However, some finance companies will require a minimal administration fee to set the contract up. This isn't unusual and is normally taken at the start of the contract along with the first rental.

Are there any hidden costs?

We do not have any hidden costs. The only additional costs are applied by the finance companies directly, and will be for services such as private plates, sending Road Tax, or documentation fees at the start of the contract.

Where is my van coming from?

Your new van will be supplied by one of our dealerships who we have strong long-term relationships with, and are confident with their levels of service as these reflect us and who we are as a company, so we ensure their service levels are the highest.

How quickly can I get my new van?

We can source stock/batch vehicles within approximately 2-3 weeks. However, to deliver within this period we require your full co-operation with sending us driving licenses, paperwork and finance documentation as quickly as possible.

Is it risky leasing a van/pick-up truck online?

No. We know our customers can be a little apprehensive at the start when buying their new vehicle online, and we appreciate it is a significant purchase for you - which is why we work hard to supply you with the best discounts and most competitive prices in the UK.

You can read our market leading testimonials on our website by clicking here: www.vanarama.com/about-us/customer-testimonials.html.

We also have a unique 7-point price guarantee to provide all of our customers with peace of mind when dealing with us directly, which we are happy to discuss further with you. Please follow this link for further information: https://www.vanarama.com/about-us/price-protection-guarantee.html.

Part Exchange

Do you offer part exchange?

Yes, we would welcome the chance to take your current vehicle in part exchange and pride ourselves on giving you the most competitive valuations in the marketplace.

Do you need to see my vehicle if I want to part exchange?

No, although we do require a full description of the vehicle when taking the details for valuing. The valuation is based on your description and although it is extremely rare any issues arise, if they do, it is due to damage on the vehicle that we have not been previously notified about. Should this arise we deal with this directly with you at the time.

Will you still take it if it's in poor condition?

We will always look to get the best valuation for you regardless of the condition of your part exchange, although again we require full descriptions of damage and condition at the time.