If you're looking at buying a van for your business, have you considered leasing? This guide will take a look at the pros and cons of buying and leasing a vehicle and which option could be the best one for you.
What's The Difference Between Lease And Purchase?
The main difference between buying and leasing is simple - if you buy a van, it's yours. You usually pay for the vehicle upfront and own the asset.
If you lease, you'll pay monthly and, depending on the finance model, you'll likely have to give the van back at the end of your contract.
Buying A Van For Business
The automatic choice for many when looking for a new van is to browse those available to buy. This does come with a range of pros and cons though:
Advantages Of Buying A Van
If you buy a van for your business, the benefit is that you don't need to worry about a monthly payment, you own the asset and you can do whatever you want with it, including sell it if you need to.
Disadvantages Of Buying A Van
Buying a van outright does come with a range of downsides too. Having to stump up lots of money upfront can be difficult and could have an impact on your cash flow.
Most vehicles tend to depreciate in value from the moment you get them, so you could very well be spending a lot more on it compared with how you much you might spend if you leased.
Leasing A Van For Business
Leasing a van for business means the van won't technically be yours, but you'll get to use it for the length of your lease (typically 2-3 years) and pay for that usage monthly in affordable payments.
Advantages Of Leasing A Van
When it comes to leasing a van there are some pros and cons to consider. However, the advantages very much outweigh the disadvantages. These include:
Fixed Monthly Cost
When you lease a van, before you agree the contract, you'll agree a set monthly fee that won't change throughout your lease. This means you'll always know where you are, and with a set monthly cost you'll be able to better manage your business' cash flow. Leasing enables you to forward-plan and manage your finances.
Drive A New Van
Another great thing about leasing is that you get the drive the latest model every few years. Just like replacing your mobile phone and upgrading to the latest model, leasing allows you to do this with your vehicle. Once you get to the end of your lease you just hand the vehicle back and choose which brand new van you'd like next.
No Depreciation Costs
The minute you drive away in your brand new van, it depreciates in value. Leasing a van means you're not stuck with the worry of a depreciating asset if it has gone down in value the same way you would be if you bought it. You just hand it back and choose your next lease.
Less Maintenance & Admin
As part of a lease agreement, there are great deals you can get on maintenance packages that you wouldn't be eligible for if you bought your vehicle.
Tax Benefits Of Van Leasing
Finally, if your business is VAT registered, the great news is that you can claim back your monthly lease payments as a tax deductible expense.
By leasing you have the extra security of always contacting us if there's a problem throughout your lease. Whereas buying means you're on your own and responsibility of fixing your van is something you're stuck with.
Disadvantages Of Leasing A Van
There are not too many disadvantages to leasing a van:
- If you're someone who likes to own, you may see having to give it back at the end of your lease, a disadvantage.
- Another aspect of leasing some may see as a disadvantage, is that you have to forecast how many miles you're likely to drive over the course of your lease. Going over your mileage limit comes with a cost.
- The same applies to damage. If you substantially damage the van, you will need to pay a charge. However, you'd expect not to want a damaged van whether you leased or bought, so either way you'd need to have the van repaired to keep your business looking the business!
Do Vanarama Sell Vans?
Instead of selling vans, we lease brand new light commercial vehicles. Leasing is the affordable, hassle-free way to drive a brand new van for convenient monthly payments instead of paying a huge lump sum in one go.
Take a look at our unbeatable van lease offers on a huge range of vans suitable for every business need.
Head back to our van leasing explained hub or take a look at our latest van leasing deals