Can Sole Traders Lease a Van?
Sole Trader Van Leasing Explained
Leasing a van is not only incredibly easy, it's also far more cost-effective than taking out a bank loan or asking a dealer to provide finance. Unlike buying a vehicle outright, leasing actually helps registered sole traders drive the brand new van they want for simple monthly rentals with significant tax advantages, rather than having to pay outright when they settle for whatever used van they can find.
Can I Lease A Van As A Sole Trader?
The short answer is: yes! The long answer is: double yes! There's nothing stopping a sole trader from leasing a van, in fact it will often work out cheaper and easier to lease instead of buying a van. The only thing you need to do is pass a credit check - the rest comes down to personal budget and choosing the van you want to drive.
In fact, buying a van outright can often be a bit of a minefield with many sole traders often growing tired of the purchasing process and deciding to just head to the nearest used van forecourt and buy whatever's there.
Customers make a judgement on the quality of a sole trader's work by looking at the vehicle they drive, leasing a brand new van means a sole trader can avoid turning up in a used vehicle and instead choose the vehicle they think works best for them and makes the best possible statement about their professionalism.
Are Sole Traders Eligible For Van Leasing Finance?
Sole traders are just as eligible to lease a van as any other business or individual, subject to a credit check and the ability to budget for simple monthly rentals.
As a sole trader looking to lease a van, there are 3 key things you'll be asked to provide to the finance company to check your eligibility through a credit check:
Sole Trader details - name, date of birth, marital status.
Company details - name, address, company registration numbers and annual turnover.
Business bank details - bank name, account number, sort code.
The only time you'll be asked to provide anything beyond the information above is if your business is less than a year old… or if you've ever been refused finance in the past. In these cases, the most likely bit of information you'll be asked to submit are:
- Business bank statements for the last 3 months.
Once that's all out of the way, sit back, sign some documents and wait for your brand new lease van to show up on your doorstep.
Should Sole Traders Buy Or Lease A Van?
Leasing is rapidly becoming the go-to way for sole traders and small business owners to drive the brand new vans they want. No one wants to settle for less when leasing helps them drive the best van to keep their business moving.
Here are the major benefits to leasing a van:
You'll avoid huge up-front costs and instead pay far a single, far lower initial rental payment.
You'll be able to budget far more easily thanks to fixed monthly rentals for the duration of your lease agreement.
You can tailor the deal to the duration and mileage needs you determine.
Adding a maintenance, servicing and tyre package is easy and can be included in your monthly rentals.
There's no hassle trying to tax your vehicle because it's already baked into your monthly rental payments.
Deprecation is something you'll never have to worry about… you won't even have to dispose of the vehicle at the end of the lease.
Every new vehicle comes with a standard manufacturer's warranty for your peace of mind.
Leasing lets you upgrade your van to a brand one every 2-5 years.
With all those benefits, you're no doubt wondering what the catch is. Well, there are very few, and most of them you're unlikely to encounter if you drive sensibly and look after the van.
Here's a few things to bear in mind:
If you need to terminate the lease early, there will be charges - usually 50% of the remaining rentals.
Your vehicle will be checked for damage at the end of the contract under Fair Wear & Tear Guidelines. These are exactly like they sound: fair wear and tear is acceptable, but if any damage exceeds it you may have to pay a charge to sort the damage.
All leases are subject to a mileage limit, so make sure you factor that in when you're making your selection at the beginning of the lease. If you exceed your mileage limit you will be charged a pence-per-mile sum at the end of the lease.
You need to insure your van just like any other vehicle on the road.
In the end, whether you choose to lease or buy will come down to whether you want all the benefits lists above or not. Leasing has proved to be a "sticky" product - people who try it tend to stick with it because it works!
What Are The Best Vans For Sole Traders?
The type of van you go for will be dictated by the type of business or trade you work in. If you're a low material trade, small vans rule the road thanks to their car-like drive and compact loading bays… but if you're a high-material trade medium and large vans will be turning your head with their cavernous loading bays and high payloads.
Small vans like the Volkswagen Caddy, Ford Transit Connect and Mercedes-Benz Citan are key picks for a sole trader looking for the perfect blend of compact size and smart looks - electricians are one such trade that you'll often see in smaller vans.
Medium vans are typified by vehicles such as the Mercedes-Benz Vito, Vauxhall Vivaro, Volkswagen Transporter and Ford Transit Custom. They are top choices for a sole trader looking to strike the balance between larger loads and spacious cabins - carpenters or heating engineers swear by medium vans.
Large vans including the Ford Transit and Peugeot Boxer offer up an awesome amount of storage space and high-weight payload capabilities for sole traders who place a premium on being able to carry everything - you'll see traders of all types using them.
And then there's specialist vehicles such as refrigerated vans, Lutons, dropsiders, tippers - you'll go for the one your trade needs based on its speciality.
Question Answered By Tom Roberts
Tom Roberts is Vanarama's resident commercial vehicle expert, video presenter & content manager.
Tom's passion for commercial vehicles is at "diesel-head" level, so it's a good thing he's found a job to channel it into