Published on Tuesday 05 March 2019 in Van News
Leasing a new van or pickup is a great way for sole traders, limited companies and small businesses to obtain a van without having to make an expensive initial cash outlay. It is essentially a long-term agreement that offers a simple and cost-effective choice for company vehicle finance.
Steps of leasing explained
Here are the steps of leasing a van made simple:
- You choose the van you want, or we can help you choose the best option to suit your circumstances and budget (we have videos and more than 5576 customer reviews to help you choose).
- We find the best package for you, in terms of deposit, contract type and contract length.
- You pay an initial deposit at the beginning of the lease, typically the equivalent of six monthly payments although zero deposit agreements are available.
- You pay a fixed monthly payment for the term of the lease.
- At the end of the lease period (typically 2-3 years) you give us the van back if you've chosen a Contract Hire agreement. If your contract is a Finance Lease or Contract Purchase, you'll have a couple of options that we will talk you through.
- You can then walk away, or start a fresh lease with a new van.
If you shop around, which we suggest you do, then we'll do our best to match your quote from a competitor with our Price Protection Guarantee.
Types of van and pickup leasing
There are three main lease products we offer at Vanarama through which you can purchase your new van. These are:
They are set up differently and differ in terms of their flexibility and tax. They are however all the same in the sense that there are three main factors that decide what you will pay on a monthly basis:
What three factors determine monthly payment?
- Cost of the vehicle: The less you pay for the vehicle, the less your outgoings are going to be on monthly payments.
- Interest rate: The more finance volume we put through our funders, the better the interest rates are that we can offer you.
- Residual value: Our funders have a good idea of what they think a van will be worth at the end of your contract lease. So, as well as how you long you keep your van for and the mileage, they will take into account what they expect the vehicle to be worth at the end of the contract period.
At Vanarama you can be sure that we will always offer helpful advice and do our best to find you the best rates and deals for your new van.
Advantages of leasing a van or pickup
This is an affordable option that has a number of benefits for sole traders, self-employed and small businesses:
- This will spread your payments over time, compared to buying a new or used van up front.
- No need to save up a huge deposit.
- With a Contract Hire agreement, you can even take out a maintenance package so that you don't pay additional maintenance costs.
- This is the perfect choice if you like the idea of driving a new van every few years. At the end of your agreement you can return or sell your existing van (depending on your contract type) and choose a new one on a fresh leasing agreement.
- You will not need to worry about vehicle depreciation because you are not buying the vehicle outright.
- If you're VAT registered, you'll be able to claim back all the VAT on your van whichever contract type you choose, as it's classed as a commercial vehicle.
- Your new van won't need an MOT for the first three years, so you won't need to worry about that every year.