Guide
Should You Buy Or Lease A Van For Your Business?
If you are thinking about getting a new van for your business, have you thought about leasing it? This guide will help you understand the advantages and disadvantages of buying or leasing a brand-new van or pickup truck so you can choose the right option for you.
Words by: Tom Roberts
Published on 8 February 2024 | 0 min read
If you are thinking about getting a new van for your business, this guide will help you understand the pros and cons of buying or leasing a brand-new van so you can choose the right option for you.
What's the Difference Between Leasing And Purchasing?
When you lease a van, you pay monthly, and when the lease ends you return the van.
Buying a Van for Business
Many people default to buying a van when they need a new one, but there are pros and cons to consider:
Advantages of Buying a Van
When you buy a van, you own the van. You can use the van as you see fit, even selling it on if you need to.
Disadvantages of Buying a Van
Paying a lot of money upfront can be tough and affect your cash flow. Also, vans (like most vehicles) tend to lose value over time, so you might spend more on finance or purchase payments overall, compared to if you had leased one.
Leasing a Van for Business
Leasing a van means you do not own it - you get to use it for a set time (usually 2-3 years) paying fixed monthly payments.
Advantages of Leasing a Van
When you decide to lease a van for your business, you are essentially renting it for a specific period (most customers choose to lease a van for 2-3 years) making regular monthly payments. Leasing a van offers several benefits to those who choose to do it:
- Fixed Monthly Costs: With a van lease, you agree on a fixed monthly rental payment amount at the start - this monthly payment will not change throughout your lease. This predictability is a major plus for businesses wanting to manage cash flow and those wanting to improve their business planning.
- Road Tax Is Included: Road tax (specifically, VED tax) is already included in your monthly payments, so you do not need to worry about taxing the van.
- Drive A New Van: Leasing lets you drive a brand-new van and the option to upgrade it to the newest model every few years. When your lease ends, you return the van (it is usually picked up from your home, office, or a location of your choosing) and then you can choose a brand-new van for your next lease (if you like).
- Drive A New Van: Leasing lets you drive a brand-new van and the option to upgrade it to the newest model every few years. When your lease ends, you return the van (it is usually picked up from your home, office, or a location of your choosing) and then you can choose a brand-new van for your next lease (if you like).
- Reduced Maintenance And Admin: Lease agreements often include the option to add a maintenance package that covers replacement tyres, servicing and more – these are often not available when purchasing a vehicle.
- Tax Benefits Of Van Leasing: If your business is registered for VAT, you can claim back the monthly lease payments as a tax-deductible expense.
- Added Support: With a lease, you have the reassurance of being able to contact the leasing company if issues arise during the lease period.
In summary, leasing a van provides financial flexibility and the opportunity to regularly drive new vehicle, making it an appealing choice for many businesses.
Disadvantages of Leasing a Van
There are some drawbacks to leasing:
- You will need to estimate how many miles you will drive annually and stay within the limit you pick until the lease is complete.
- You must give the van back at the end of the lease – you do not ever own the van, but you can use it like you do.
- Damaging the van or exceeding the annual limit can lead to extra charges – the size of which will depend on the extent of the damage (and if it is minimal enough to be considered ‘fair wear and tear’) or the amount of miles you have gone over by.
Does Auto Trader Sell Vans?
Auto Trader now sells new and used vans and can broker leases on new vans. You can explore the van lease offers on a wide range of vans suited to various business needs on our van leasing page.
If you want to learn more, check out our ‘Van Leasing Explained’ articles that are filled with in-depth information on how it all works, or if you are ready to lease today have a look at the latest van leasing deals.
If you want to learn more, check out our ‘Van Leasing Explained’ articles that are filled with in-depth information on how it all works, or if you are ready to lease today have a look at the latest van leasing deals.