Hire, buy or lease a van?
Most of our members have at least one van and we often get asked for the best advise on the best way to source a van for their business. There is not one hard and fast solution, but this article covers some areas for consideration.
Quite often the decision can come down to the availability of money you have to hand but other factors include how long you intend to keep the van or for what purpose you need it for.
Easy solution, you pay for it, you own it. You are then responsible for the upkeep of the van, but it is yours and an economical buy to get your van. However, not every business has the cash around to buy a van outright which means you will need to consider one of the other options. There are great bonuses to buying your van outright and owning it such as: –
- You can negotiate a good price
- You can keep the van for as long as you like
- You can choose to trade in your old van against a new one
- Restrictions don’t exist like for mileage
- Tax implications are less
Downsides can however include: –
- You are responsible for any damage and repairs
- Depreciation of the value – you will lose money on the value from the day you own it
For business, this is quite often a popular choice as it fixes the cost of their van and helps if you don’t have the money outright to purchase your van. Below are some simple points to consider: –
- You will be in a fixed-term contract usually between three and five years
- You won’t own the van at the end of the contract
- If you do want to own the van some agreements will allow you to do so by paying what they call paying a ‘balloon’ payment at the end of the term which can sometimes be very costly
- Some agreements come with a fixed maintenance and breakdown package
- At the end of the contract, you simply return the van and get a new one
- You must service the van according to the manufacturers recommendations
- Mileage restrictions come with each agreement
- Penalty clauses – these can be in place for any damage, going over the miles agreed
The best advice is to shop around and read the small print in relation to penalties and handing the van back – you can then ensure that you get no nasty, costly surprises at the end of the contract.
The length of time you hire a van can vary from one day to a much longer agreement. This option is very similar to leasing one but there is less responsibility for the upkeep and maintenance of the vehicle. The servicing, insurance and the damage will be taken out of your hands. You choose the van you want to hire, pay a fixed price, drive the van away and just be liable for your fuel.
It is a more expensive option than leasing as hiring provides more flexibility. Hire as previously said can be short or long term but even if you opt for long term, you can usually due to clauses stop using the van, return it and your payments would stop very quickly – great for flexibility.