Whether you’re looking to obtain your first work van, replace a trusty old faithful vehicle or add to an existing van fleet, the decision over whether to purchase a van outright or go down the van leasing road can be a tricky one.
You want a solution that’s affordable, cost-effective and practical for both the short and long term whether you’re a sole trader, limited company or vehicle fleet manager – and the truth is, there is no one size fits all solution. There are lots of variables to think about and it can feel a bit mind-boggling, knowing if you’re doing the right thing for your business.
At Find & Finance we supply used vans on a regular basis to a wide range of businesses including tradesmen, couriers and logistics firms and pride ourselves on offering unbiased advice, helping customers make the decision on whether buying or leasing would better suit their needs.
We thought we’d share some of the things we take into consideration when helping our clients choose the right option for them.
Will it be used or abused?
First of all, be honest about the kind of abuse your new work van is going to have to take! Are you going to be regularly loading it with heavy tools and parts? Is it going onto building sites where there’s more chance of it getting dinked and dented? Is it going to be loaded and driven by more than one person?
If you know your new van is going to experience a bit of heavy handling during its lifetime with you, then I would think twice about van leasing. A lease vehicle will need to be returned in good condition, otherwise you’ll end up paying out a hefty sum to bring it up to scratch. If you buy your own van, however, as long as it’s mechanically sound and maintained to a roadworthy condition, you won’t need to be quite so precious about it getting a bit scuffed and rough around the edges.
How long will you need it?
Depending on your business, you might not need to consider keeping a vehicle long-term. Logistics companies, for example, might need to increase their van fleet numbers to cope with seasonal delivery peaks, but then wouldn’t make best use of them in quieter periods. If this is the case, a short term flexi-lease would prove more cost-effective than buying and owning a van that could be redundant half of the time.
If you’re looking for a reliable vehicle that will last you for several years, however, buying a van can save you money the longer you keep it. Once paid for, your only associated costs are maintenance and running costs. A well looked after company vehicle can ultimately save owners hundreds of pounds a year in ongoing monthly payments.
Can you predict its usage?
If you’re not sure how many miles you’re likely to cover, you might find yourself incurring additional costs if tied into a lease agreement. Whether you’re leasing one van or a fleet of vehicles you will need to set out the expected mileage for each one. How much it’s driven during the leasing term will affect the vehicle’s value at the end of the contract and exceeding your mileage allowance will be subject to a per mile fee at the end of the contract, which could come as a bit of a shock! This can be particularly difficult if you’re just starting out in business and have no historical record to look back on to calculate what your mileage might be. It can be equally tricky if you’re getting a new van because your business is expanding. Can you accurately predict how busy you’re going to get, or how far you’ll be travelling in the new van? Ownership removes these limitations and risks.
Tax implications
Is it better to have an owned vehicle show as an asset for your end of year corporation tax, or not? It’s good to be aware, before you commit to leasing or buying a work van, of the implications this will have on your company accounts and tax bill. We can offer advice in this regard, but would always suggest you speak to your company accountant who knows the ins and outs of your company finances before making a decision, as this will affect what is recorded on your balance sheet. Any accountant worth their salt will be able to offer advice on the most tax-efficient option.
Upgrade or replace?
Think about when the time comes to change your company van. Under a lease agreement, you’re saved the hassle of selling or trading in your van and can simply upgrade to a newer model. This will limit your choice of next vehicle, however, to within the range offered by your leasing company. With an owned vehicle, you have the freedom to seek out whichever make and model you want.
Whatever your initial leanings, carefully considering these questions before you commit to leasing or purchasing a new van for your business will help you determine the most affordable and practical choice for you.
If you would like to discuss purchase and finance options to buy a well-maintained used van, or to discuss whether a lease option would be better suited to your needs, we’re happy to offer impartial advice.
Find & Finance offer a different buying experience in the used vehicle market, with customer satisfaction our number one priority. We search across the UK to find exactly what you want, complete comprehensive vehicle checks to ascertain its condition and deliver direct to your door. We’re also not tied to one finance provider, meaning we won’t endorse a costly plan where there are more affordable options or better terms available.
Find out how we offer a premium van-buying service AND save you money here.
Find & Finance Ltd
Unit N1a, West Point, Middlemore Lane West, Aldridge, WS9 8DT
0333 006 3825