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Acquiring a van for your small business can be an overwhelming task. But broadly speaking you’ve got two options: van leasing or buying. In this blog, we’ll look at ways they differ and which option will best fit your business.
The benefits of van leasing
The British Vehicle Rental and Leasing Association (BVRLA) highlighted the trend for business leaders to opt for leased fleets. It’s latest survey indicated its business car-and-van leasing fleet enjoyed a notable 6.5% year-on-year growth.
BVRLA chief executive Gerry Keaney, said: “Many business owners prefer the idea of paying for their transport needs in smaller, fixed, regular instalments rather than one large, upfront sum. Due to their impressive buying power, leasing companies can provide competitive monthly rates.”
As well as tailored payment plans to suit your business, here are some others reason why hiring commercial vehicles is often cheaper than buying:
- Money has a time value. According to research by motor industry expert Professor Cooke, each pound spent on buying a vehicle in the first year is worth more (and costs you more) than each pound spent in years 2, 3 or 4.
- Money not sunk in one-off vehicle purchase can be invested – and earn you income.
- Hire contracts include maintenance, servicing and fleet admin – you don’t pay out and can concentrate on other areas of your business.
- Vehicles depreciate in value – if you hire them, you don’t lose capital this way.
To buy or not to buy?
Buying a van for business use can often be an attractive decision because it means you will own it outright to do with it as you wish, and you’re not tied to any hire terms or hidden agreements. Whereas with leasing, you’re not investing in something that you will eventually own - you’ll just be renting its services for an agreed fee (usually per month).
However, van leasing companies have evolved in response to customer demand and most offer flexible hire terms to meet your business needs.
Ultimately you should weigh up the pros and cons of buying and leasing to determine which is the best fit for your business. But for now we’ll leave you with some advice a wise man once told: “If it appreciates, buy it. If it depreciates, lease it.” (Paul Ghetty)
For more advice on choosing the right option for your business, our free eBook will give you more in-depth information on which to base your decision. Download your free copy below:
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