Looking for a new van for your business? Not sure whether to buy or lease a vehicle? Then read on to discover the advantages of both scenarios so that you can make the right decision for your business.
Lease or purchase: an overview
The biggest advantage of buying a van outright is that you make one payment and it’s yours. However, there are circumstances in which leasing may work better for you. With leasing, you typically pay a monthly fee, and then after the initial lease period, you have the option to buy it outright for a reduced sum.
The advantages of buying
However, buying a van outright has certain advantages, for if you have a significant lump sum, it can be used to your advantage, putting you in a strong position to negotiate a particularly good deal. If you’re going to do this, think of buying close to the end of each quarter or towards the end of the financial year. Then dealerships will be trying to reach their targets and you’ll be in a good position to haggle. You may even have an existing van that you can trade in as part of the deal.
Moreover, if you own a van outright, you are in control of the mileage you do, with no limit on the total amount you can cover. In addition, you’re in complete control of the maintenance regime. Most of all, buy a van outright and it’s your physical asset entirely, that you can do with as you wish – selling it whenever you see fit. However, your physical asset will also be a depreciating asset as it ages; and you’ll be lumbered with the increasing maintenance costs as time goes by – so you need to decide if that’s a burden you really want.
The advantages of leasing
Leasing a van also has a number of advantages, firstly rather than having to shell out a huge lump sum; you can pay more reasonable monthly payments and spread the cost of your vehicle. You’ll also get to drive a brand new vehicle without the initial hefty outlay. What you do need to be aware of is that most lease vans come with a limit on the mileage you can cover each year, so ensure it’s a suitable mileage for your business before signing an agreement, and you could even download an app like MileIQ (you can click this to find out more) to help you keep track of your mileage and ensure you are staying within your limits. However, many leasing agreements come with added extras such as maintenance and breakdown cover included, so you won’t be liable for the increased maintenance costs as your vehicle ages, which can work really well.
In fact, lease a van, and you’ll never need to drive a vehicle of any great age, as you can simply return your vehicle at the end of the leasing period and lease a brand new one. However, if you find yourself liking the van you are leasing, you’ll often have the option to purchase it for a reasonable price, after the initial leasing period is up. If you do want to find out more about the advantages of UK van leasing, there are experts out there to help you.
The choice is yours
Before making the decision about whether to buy or lease van, you’ll need to give thought to the needs of your business, your finances and your preferences. Both leasing and buying have a range of advantages; it’s about which will best suit you.