Lease or buy a van?
If you’re self-employed, are an entrepreneur, or have a small business, running a business can be hard. Optimizing your finances and keeping them low, is a big part of your success. If you rely on a van to keep your business running, you might want to look into how you can keep your van expenses down.
The big questions are always: How am I going to finance a van? Should I lease or buy a van for my business? Do I have the capital to buy a van myself? Or is leasing the smarter financial option? These are questions many entrepreneurs, self-employed and business owners often face. In this blog we list the advantages and disadvantages of purchasing or leasing a van to make the decision much easier!
The advantages of buying a van
Buying a van has many advantages. To begin with, the van is all yours. That means that you decide what happens to the van, and how you’ll use it. If you decide to make changes to the van, you are free to do so. If after some time you want to sell it, or keep it a bit longer, it’s up to you. When buying a van, you won’t have the monthly lease instalment to pay, and you can drive as many kilometers as you like.
The disadvantages of buying a van
Owning a van also has some disadvantages. You’re responsible for maintenance, which can cost a lot of time and money. If you’re unlucky, and your van has been damaged, you’re responsible to get it repaired, which can make things expensive. You’re responsible for paying for roadside assistance in case you need it, insurance, and different taxes. Most importantly, a van has a big initial investment. This may leave you with less money for other important business expenses.
The disadvantages of leasing a van
Leasing also comes with disadvantages. You have to pay a fixed monthly rate for an agreed period of time, and there are some conditions, that you must adhere to. For example, the amount of kilometers you can drive, or an early termination fee if you want to end the contract early. The van belongs to the leasing company, and at the end of the leasing period, you will need to return the van. If you would like to keep the van at the end of your contract, there is the possibility to buy, granted that all circumstances allow it.
The benefits of leasing a van
What are the benefits of leasing a van? When you lease a van, your leasing company will arrange and pay (almost) everything for you. Sounds good, right? As the leasing company buys the van for you, you don’t have to make the large initial investment yourself. In return, you pay a fixed monthly rate, that includes insurance, tax, maintenance, repair, and in some cases also tyres. That makes budgeting easier, because you know exactly what the costs of your van are per month. That way you won’t have any unexpected costs popping up. LeasePlan takes care of all the van administration, so you can focus on running your business. Leasing will give you more time and money to invest in your business.
Pros and cons
- No major investment needed
- Fixed monthly rate
- No unforeseen monthly expenses
- Van administration is taken care of by leasing company
- Roadside assistance is included
- Enter a contract for an agreed period of time
- Return van after end period
- Van is all yours
- Unlimited mileage
- Not tied to a contract
- Insurance, inspections and maintenance is your responsibility
- High repair and maintenance costs
Should I buy or lease?
It depends on your situation and what you’re looking for. Do you have the means to buy yourself, and do you want the van to be under your own management? Then buying is worth considering. Do you want convenience and therefore more time and money left for the business? Then leasing is your answer.