Your business van is both a work horse and often the first impression a client has of your business. You need a van that won't let you down no matter what - which often leads people down the path of shopping for a brand new van as opposed to used and potentially abused one.
So, if you're looking to invest in a new van - there are two main routes available to you, buying outright or finance. We're going to be focusing on contract hire for the sake of this post - we're a van leasing company after all.
When leasing a van for business, you'll be paying a fixed monthly cost throughout your lease agreement. You can add additional maintenance packages on top of your contract, in which you'll also cover servicing, tyre replacement and perishables. This means you don't have to shell out a large amount of money up-front, but instead stick to a set budget or to spread the total cost of the rental over a longer term to bring the monthly price down to your desired rate, though you will never ultimately own the vehicle nor will you have to worry about the depreciation.
When you lease a van through your business, you are eligible to claim VAT back on each monthly payment. Of course, you'll have to be VAT registered to claim this back, but you need to be VAT registered in the first place to lease a van through one of our finance partners.
If you're providing a fleet of company vans and fuel to your employees, you also have abide by your National Insurance & Reporting obligations.
You won't have to worry about road tax either, as this is typically covered by the finance provider unless explicitly stated or if you're taking out an operating lease.
While leasing a van has its tax advantages, it doesn't come without some drawbacks.
Before your agreement, you'll have to agree to an annual mileage limit and will always have this restriction until your contract ends. If you exceed your agreed mileage allowance, you'll incur a mileage charge at the set rate identified in your contract.
As the van will be returned to the finance company at the end of the contract, the van must be returned in an acceptable condition as dictated by the BVRLA's fair wear and tear guidelines. If you have damaged the van beyond what could be considered reasonable wear and tear, the finance company may charge you for the damage upon the pick-up and inspection of the vehicle.
Ultimately, there's somewhat less freedom if you opt for a van lease rather than buying a van, but if it makes more financial sense for your business to replace your van every few years, you can also end up saving a significant amount of money on your lease by choosing the right deal.