Is it time to buy a new van?
July 31, 2019
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July 31, 2019
When it’s time to trade in the van for a new model, are you torn between purchasing your van outright, or going for a lease agreement? In this blog, we examine the pros and cons of both, to help you work out what’s right for your business.
Historically, many of you have bought your van outright. It’s a tried and tested formula, with a number of advantages. Firstly, you’re adding another asset to your business. You’re also investing into one of your most important work tools. By owning your vehicle outright, you can trade, sell or swap your vehicle without having to receive authority from the dealer. That’s why many of you feel you have more freedom and can use it as you like, without restriction.
You don’t have to worry about lugging tools around in the back of a van you own. In a lease agreement, any damage to the van will have to be fixed before the end of the contract, or else you’ll be fined. Also, some lease agreements won’t allow you to put on a van wrap, one of the best ways to advertise your services. Purchasing your vehicle outright affords you far more flexibility and freedom, which can make a big difference when trying to grow your business.
Although there are a number of reasons why you might buy your van outright, you’re also purchasing an instantly depreciating asset. Nowadays, many of you see more benefit in leasing your van. Under a lease contract, you’re not responsible for all service and maintenance costs. Furthermore, many firms prefer the idea of spreading van payments across a number of months, rather than making a hefty initial payment.
Removing such a large cost from your company’s books can make a big difference in improving cash flow. What’s more, as long as you use the van exclusively for work then the cost of leasing payments is allowable against tax. Overall, lease contracts reduce many of the stresses associated with owning a van, especially if you opt for a leasing agreement that includes a maintenance package. The only thing you’ll have to worry about is making the monthly payment, which will often be fixed throughout the contract’s term. If you’re looking to lease, then make sure you shop around, as agreements can vary between providers.
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It’s important to remember Checkatrade members are entitled to exclusive discounts on the purchase of vans from some of the nation’s leading suppliers. As part of an exclusive partnership, Checkatrade members can save up to £6,800 off selected new Mercedes-Benz Vans models. Additionally, we’re proud to offer savings on vans across all Fiat Chrysler Automobiles (FCA) brands. This includes vehicles from leading suppliers like Alfa Romeo, Jeep, Dodge and Lancia. The deal also includes a saving of up-to 46.5 per cent on the Fiat Professional range.
For most in the trade, a van is something of a home from home. Many of us probably spend the same amount of time in the back of one as we do in our houses. In fact, the Federation of Master Builders (FMB) estimates the average tradesperson will spend two-and-a-half years driving their van across their working lives. It’s no surprise that the process of choosing a new one can be time-consuming.
Checkatrade Board Member Garry Sibbald of Perfect Pointing has experienced leasing a van first hand. His insights are worth serious consideration before you make your final decision. Garry highlights that fuel savings can be significant with a newer van but also you should take care to fully understand the contract terms of any leasing arrangement and take time to cost out all options on offer accurately. He found that often a higher specification van can work out a better deal in the long run. The devil is always in the detail. So do your maths and seek independent advice before you sign on the dotted line.
For us, the advantages of leasing a new vehicle outweigh the negatives.
Previously we’ve always bought outright our vehicles but the maintenance costs of replacing, clutches, brakes, suspension parts and just getting them through an MOT can mount up. When we compared the costs it made sense to lease a van over 3 years with a 3-year warranty and with no MOT’s to worry about the running costs each year are a known quantity.
We have an LWB Custom Transit and it’s perfect for our needs. One advantage that we hadn’t factored in was the gain in the economy of running a modern van over an older one and this has significantly reduced the monthly fuel costs.
A word of advice when looking at leasing a van; often the higher-spec vans can be cheaper to lease than the base models because of their return value after 3-4 years so check the figures for all the models. You might as well have all the toys if the cost each month is going to be the same… or cheaper!
For most in the trade, a van is something of a home from home. Many of us probably spend the same amount of time in the back of one as we do in our houses. In fact, the Federation of Master Builders (FMB) estimates the average tradesperson will spend two-and-a-half years driving their van across their working lives. Given how much time tradespeople spend in their vehicles, it’s no surprise that the process of choosing a new one can be time-consuming. One final thought, reflect on your company’s first impression to a customer when arriving in a smart modern van compared to turning up in an old van that is tatty from age. An affordable LeasePlan can give a small company this subtle advantage over others at a key point in negotiations for new business.
We hope that by reading this blog, you feel more confident in finding a van agreement that’s right for you.
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