There are so many new vans to buy outright that it may feel like this is the best option by default, but is it? Van leasing is becoming increasingly popular and is a model that has been shown to work in many countries around the world. If you’re not familiar with how it works and how it compares to buying outright, you’ve landed in the right place!
In this quick guide, we’re going to compare and contrast these two proven ways of adding a new van to your business. Once you have all the facts and figures at your fingertips, you’ll be able to make the right decision for your business and start growing it like never before.
Pros and Cons of Owning Your New Van
Take a look at some of your options with us, such as the Fiat Doblo Crew Van or the Citroen Berlingo M Enterprise Edition. The first thing you notice is that the initial purchase prices are highly competitive and designed to put your business ahead of the competition. By making the prices affordable and fully transparent, we want to be on your side from day one, but is outright ownership always the best approach?
Taking a look at the pros and cons may help you to see the bigger picture:
- Owning the van outright means there are no ongoing monthly payments, which will help with the cashflow of your business.
- Outright ownership means that you can sell the van at any time and recoup much of your initial investment if it has been well maintained.
- Looking at new vans to buy outright allows you to sidestep interest on repayment plans.
- Buying a van outright may tie up a large part of your operating capital that you might need for other things in the near future.
- Depreciation may mean that a finance plan helps you to hold more long-term value by taking a different approach.
As you can see, every plan will have its pros and cons. We feel the least we can do is to show you the whole picture so that you can make the right choice for your business.
Van Leasing: Understanding the Benefits and Limitations
If you’re looking at the many new vans that we can offer, such as the Iveco Daily L3 Dropside, and want to spread the cost, leasing may be for you. Taking a closer look at how it works will help you to make the right decision for your business:
- Low monthly payments will allow you to retain a large part of your operating capital so that you don’t miss other opportunities to expand your business.
- Fixed monthly costs make leasing one of the most popular finance methods for businesses who are looking to scale in a sustainable manner.
- Many van leasing plans include road tax, servicing and maintenance packages, and extended warranties.
- Leasing a van means you can hand it back at the end of the agreement and fund the purchase of your next van with a clean slate.
- The leasing route will, however, mean that your monthly overheads go up compared to buying outright.
- You will also be responsible for the wear and tear on the van when you come to hand it back, and will have to drive within pre-agreed mileage limits.
Breaking things down like this will help you to get a clear view of your options. If we then take a closer look at the costs involved, it will help you make your choice.
What are the Available Leasing Options?
Our new and pre-registered vans are available via a variety of leasing options. Personal Contract Hire (PCH) is one of the most popular approaches and typically involves an agreement of 2-5 years in length. You are essentially renting the van during this time, and then you hand it back without having to pay anything when the contract finishes.
Business Contract Hire (BCH) works in a very similar way and is designed to help small businesses scale. It is also an approach that is tried and trusted by some of the largest vehicle fleets in the UK.
An alternative is Personal Contract Purchase (PCP), which is a hybrid of leasing and ownership. You make an initial deposit, meet your monthly repayments, and then have the option to make a balancing payment at the end of the contract to take ownership of the vehicle. If you no longer want to own it outright, you can decline to make the payment and hand it back.
Comparing Costs of Leasing vs. Buying a New Van
If you look at new vans, such as these new Renault vans, and decide to lease, you are protecting yourself against the costs of depreciation. You will not own the van and therefore will not have to try to sell it on at a much lower price when you want to fund the purchase of your next van.
That said, if you buy a very reliable make and model of new van and take a proactive approach to maintenance, you can save a lot of money in the long run. It’s really a matter of how much mileage you will do, how often you want to upgrade, and how proactive you are when it comes to maintenance and servicing.
New Vans to Buy Outright: Is This the Right Path for Your Business?
Taking a moment to explore our range of new vans to buy outright is the first step. From there, the main decision for many business owners is how much operating capital they want to keep inside their business.
If you are looking to expand into other areas and take on more staff, leasing may be the easiest way to scale. But if you are comfortable with your cash reserves and want to reduce your monthly outgoings, buying outright would be a better choice.
No matter which approach you take, we are always here to help. Get in touch now, and our experts will guide you through everything you need to know about our flexible van finance services. Exactly what you need when you want to grow your business the smart way and never look back.