Should you buy or lease a van?
Should you buy or lease a van for your business? We look at five facts to help you make the decision.
Should you buy or lease a van?
You need a new van. Whether you’re starting up a new business, replacing old reliable or adding a new van to your roster, there are a lot of decisions to make. There’s size, payload, fuel efficiency, insurance costs and so on. One major decision is whether to buy or lease a van.
Which way you go will depend on several factors. Our guide should help you make the decision.
The Pros Of Buying A Van Outright
For many people buying a van outright feels more comfortable. However, the cost can often be prohibitive unless you spend a good deal of time scouring for second hand vehicles.
Some of the plus points for buying a van include:
- It’s Yours. Once you’ve signed the paperwork and handed over the money the van is yours to do with as you wish. Although vehicles do depreciate in value over time it’s still a business asset that you have total control over. Being able to do as you please with your van sways many people when deciding whether to buy or lease a van.
- No Restrictions. Lease agreements have restrictions on things such as mileage per year and other elements. For some businesses these restrictions won’t be workable.
- No Monthly Payment. Yes, you’ll have the running costs of fuel, maintenance, van insurance and so on, but you won’t have the lease payment to worry about. Once you’ve taken the hit on the purchase, it’s one less financial obligation to worry about. Plus, you can offset a lot of the running costs against tax too.
On the flipside, vans depreciate in value over time and you’re responsible for all the upkeep. These factors often influence people to go the other way when it comes to deciding to buy or lease a van.
The Pros Of Leasing A Van
Leasing a van has become much more popular in recent years. When leasing a van you can sometimes also buy the van at the end of the lease period if you wish. This can work well for start-ups and smaller businesses that have been able to build up their finances during the lease.
The positives of leasing include:
- Can Be More Manageable. When leasing a van you’ll have to outlay an initial payment, which is much smaller than buying a van. Then you have a fixed monthly payment. You know where you stand with it and this can make sense for new or small businesses.
- Less Maintenance Worries. It’s fairly standard for van lease agreements to include a servicing and maintenance package. This puts all the routine costs of running a vehicle under your monthly payment so you have less to worry about.
- No Hassle Getting A New Van. At the end of the lease you can easily get a shiny new van on a new agreement. You don’t need to think about what to do with the older van, just return it and start a new lease.
The downside of leasing a van instead of buying can be if you break the restrictions of the agreement. If you exceed the mileage limit or return the vehicle with any damage you can be hit with penalties. You’re also locked into contractual payments.
So, should you buy or lease a van? Ultimately it’s a decision that comes down to what makes financial sense for you and your business. Whichever route you choose, be sure you have the right van insurance.