Originally written by Anna Jordan on Small Business
So many questions pop up when you’re thinking about financing a van for your small business.
Should you buy or lease? What about insurance? What extras will you need to add to the vehicle? To help you untangle the mess, we’ll run through the key considerations.
Decide whether buying or leasing is better for you
Buying a commercial van is as it sounds – purchasing a vehicle outright. It will be a steep one-off investment, but you won’t have to continue paying for the van(s).
Bought vans are easier to sell if you want to get rid of them whereas being on a lease will trap you in a contract for some time. Just bear in mind that new vans will start depreciating as soon as you drive them away from your dealer.
With leasing, contracts typically last three or four years. There are two different leasing options – hire purchase and finance lease. We’ve got a couple of quick definitions below:
Hire purchase – You put down an initial deposit and pay for the van in monthly instalments with the option of purchasing it at the end of the contract for a small fee.
Finance lease – The dealer