SHOULD YOU BUY OR LEASE A VAN?
Picking out a new van is pretty easy. You head to the garage, consider what you need it for and choose the one best suited to the job. The hard part is figuring out how you’re going to pay for it. Your old van is knackered, you need a new one.
So, the decision you have to make is should you buy it or lease.
What’s the difference?
You know buying. You do it every day – picking up a coffee, selecting a chocolate bar from the vending machine. To buy it you either need to dig deep into your bank or takeout a loan. But once you’ve handed over the money, the van is yours.
The other option is leasing. With leasing the big thing to know is that you’ll never own the van. You pay a monthly fee to make use of it. There are other schemes, like paying a certain amount upfront to use the vehicle for 2 years.
Why buy?
Here are the advantages of buying:
• As we said, once paid for the van belongs to you. It’s an asset and part of your business. Yours to do whatever you want with.
• More often than not, it’s the best value. When purchasing the van upfront you have room to haggle the price down to something within your budget.
• You can trade your old van for your new one to take that price even lower.
• You aren’t restricted to any sort of mileage limit, which is often a downfall of leasing.
Why lease?
And the advantages of leasing:
• For any smaller businesses that don’t want to shell out on regular maintenance costs as a van depreciates, leasing is a popular option.
• If you like the idea of regularly driving the latest and greatest van that’s on the road then leasing is ideal. At the end of your leasing contract you can return it and then choose a newer van.
• Lease companies often offer a choice of a straight lease or a lease purchase. The latter allows you to purchase the vehicle at the end of the contract.
• If the van breaks down, the company that owns it fixes it. Perfect for keeping costs down.
So which is best for you?
If you’re in a strong financial position then you’re best is to buy. Yes, you’ll have to pay for maintenance costs etc but the van will be in your possession and it could save you money in the long term.
Leasing is great if you don’t have the instant financial hit that a purchase requires. Remember though, it’ll work out more expensive in the long run. And if the leasing company you chose have a mileage restriction that you go over, you might be hit pretty hard with some added charges!
Happy van hunting!
The Goods in Transit Direct Team