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It’s no secret that investing in a new van for your business requires thought. So what's the best way to finance it? Let's take a look at some of the advantages and disadvantages of buying and leasing.
When you lease a van, instead of paying the full price, you pay a deposit followed by monthly payments over a fixed period – usually between two and five years.
One of the big advantages of this is that you need less money up front. So if you're a new business, or on a limited budget, the amount of money you would need for a leasing deposit is smaller than if you were to buy. You can also choose to return the van after the agreement, which means there’s no balloon payment required to keep hold of it.
The biggest advantage of buying a van is that you own it, and have complete freedom and flexibility regarding its use. It's a valuable business asset that is yours to keep for as long as you wish to. This is especially useful if you regularly tackle challenging terrain and are likely to accumulate scuffs and wear and tear over the years.
With a lease, you never own the van; when your lease runs out, you return the van – and lease a new one if you want to. It may well involve restrictions on things like mileage, which may be a problem for you as a business. And if you want to get out of the lease early you will probably have to pay to do so. On the other hand, vans depreciate, so if you buy a van, the value when you come to resell it will be less than what you bought it for.
Business contract purchase is a kind of halfway house - at the end of the lease, you have the option of buying the van, for a price agreed at the start of the lease, or returning it and, if you wish, starting a new lease.
In both instances, the taxman will lend a hand. You can claim the cost of buying the van as an expense on your income tax bill, usually as a capital allowance; likewise, you can claim the monthly payments if you lease it. You can also claim the running costs: servicing, maintenance, insurance, and fuel. If your van is only for business use, and your business is VAT-registered. you can claim VAT back on the monthly lease payments.
If you lease your van, you'll probably find that servicing and maintenance are included in your lease agreement, so you don't have to worry about them. You can also add aftersales care to monthly payments for a purchased van by bolting on a service plan.
Knowing all this now you are ready to go on a hunt for your next van. Check our available stock for many different types of pre-owned commercial vehicles.
Panel vans, minibuses, pick-ups, and tipper vans from the biggest makes are all available at great prices.
If you'd like to test drive one of the used vans for sale, have a look at our website to see what we have for you, and call us at our Essex dealership on 01279216163. Ask us about our vans on finance and van contract hire offers too.