Van Buying vs. Van Leasing UK: Which is Right for You?

June 20th, 2023

A new van is a big decision for your business. How you choose to pay for that new van is also important. We have 20+ years of experience in the automotive industry, so let us walk you through the benefits of van buying vs. van leasing UK and help you make the right decision for your business.

Buying a Van UK

Often when we think of getting a new van for our business we think of buying. We picture shopping around for the best vehicle at the best price and paying for it outright.

Owning your vehicle outright means you have complete control over how it’s used and what you do with it when it is no longer useful to your business. Sell it and invest in an upgrade, run it for its whole lifespan – up to you! However, ownership does mean you are entirely responsible for the disposal of the vehicle when the time comes.

Choosing an outright purchase is great if you want to just get on and use your van without the constrictions of a contract. A downside to this is depreciation, with new vehicles losing value quickly during the first year and with any excessive mileage and damage.

Owning your vehicle means you can be as demanding with it as you like (many businesses will understand that keeping your van pristine is not an option. As your vehicle gets older however, you will be solely responsible of taking care of any maintenance and repairs work which can be an unexpected expense. When you buy a van outright, a big benefit is that you’ll never need to pay anything further (other than running and maintaining costs). Whether you’re a new start business or you’ve been at it for years, it can however be hard to gather enough capital to pay the total cost of a new van.

Van Leasing UK

Van Leasing UK is becoming ever more popular as more businesses discover it as a cost-efficient alternative to buying. You simply place a deposit or Initial Payment, then agree a fixed monthly payment towards the cost of the vehicle. Dependent on the financing option you choose there may be flexible ownership options or beneficial VAT treatment.

As opposed to buying, van leasing deals allow you to spread the cost of the new vehicle across an agreed term, rather than forking out a large chunk of capital upfront.

The financial benefits of spreading the vehicle costs across the term of van leasing deals are; manageable monthly payments set within your budget and full visibility of future payments allowing for full control of your business outgoings. In addition, if your business is VAT registered, you will be able to reclaim the VAT paid on the lease vehicle.

If you’re looking at van lease UK deals, one area that differs from buying is ownership. Whether or not you can own the lease van at the end of the contracted term, depends on the finance agreement you choose. So, look into the detail of each financing option if you are interested in ownership.

Hire Purchase

Hire Purchase vans are owned by the lessee, who will pay off monthly instalments of the total vehicle cost. This means you can take advantage of the cost-efficiency of leasing deals while also taking advantage of the benefits of ownership you would have had from buying.

Finance Lease

Finance Lease, as a financing option, offers flexible options for the end of your lease. So, even though you will not own the van for the duration of the lease, you have an option to do so at the end. Alternatively, if you are not interested in ownership, Finance Lease also gives you the option to sell the vehicle on at the end of the lease term, or trade it in and part-exchange for a new vehicle lease.

Contract Hire

Contract Hire is an ideal option for anyone not interested in ownership. If your business would benefit from trading up to a new vehicle every few years, and you want to do away with the hassle of disposal, then Contract Hire represents a great option.

Buying Vs Leasing

Whether you decide to buy or lease, depends entirely on what you would like to get out of your vehicle. We have lots more articles on leasing should you want to learn more – or just call 01179625314 or Contact Us to speak to one of our experts.

If you’re interested in ownership, you have the capital to pay up front and you’re not interested in trading up to a newer model in a few years’ time – then perhaps buying is a good option for you.

Alternatively, if you’d rather spread out the costs of your vehicle, upgrade at the end of term, and do away with the hassle of disposal – then perhaps you should look at which van leasing UK deals would suit you and your company.