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Van Leasing

Van Leasing

With overheads increasingly on the rise, business owners often look to save money by leasing a van instead of buying one outright. Here, we run through the benefits that a flexible leasing arrangement can bring you, as well as the dos and don'ts of these deals in the UK marketplace.

Renting vs. Buying

The benefits of owning your own van (or even fleet of vans) should be readily apparent. You don't have to worry about mileage limits and unnecessary paperwork, giving you the freedom to take your van wherever you want, whenever you want with minimal hassle.

It can also be a big cap in your company's feather in terms of brand awareness, as you can emblazon the side of the vehicle with a logo and contact information, somethnig that is generally prohibited in a typical leasing agreement.

Against this, however, there are the obvious savings to be made from a short-term leasing deal. Apart form the deposit - which is usually modest - you won't have to pay anything at the outset, with installments spread across a fixed, mutually determined period.

You're also slightly more protected in this situation when it comes to unforeseen breakdowns caused by faulty machinery. The company responsible for leasing you the van will cover any maintenance costs (provided it isn't your drivers' fault, obviously) and provide you with a replacement whilst it is in surgery.

Your options

Which type of lease agreement you opt for will depend, among other things, on the mileage you need to cover, what sort of goods you will be transporting and, most importantly, your budget restraints.

For more freedom - i.e. the ability to travel long distances without worrying so much about mileage - it is generally best to go for a traditional lease. Under this arrangement, you will be responsible for paying a fixed amount per month for a given period, at the end of which there will be scope for either buying the vehicle outright or finding a new owner.

Contract leases are generally more popular because the van does not become your responsibility at the end of the fixed period, which means you don't need to worry about the vehicle depreciating in value, and have the option to upgrade for a better model to suit the evolving needs of your business. Here, you will once again pay fixed monthly payments, but there may be penalties for overtreading mileage limits too.

Requirements

Although you may have a need for a van the second your business starts trading, a lot of leasing firms stipulate that you must have been trading for a set period before you apply - typically this is no more than three months.

Additionally, you will also need to have a relatively clean credit record without any outstanding county court judgements. Any black marks against your name in this regard could seriously damage your chances of getting a long-term leasing deal - so if this applies to you it may be worth considering appointing a different director.

Typically, someone from the company will also need to volunteer themselves as a guarantor, as an insurance for the leasing firm in case anything goes wrong during the period of your rental.

Recommended companies

As a first port of call, we recommend you take a look at the following leasing companies currently operating nationwide in the UK:

Mr Transit

Vanarama

Hippoleasing (who currently do not require a deposit - making them ideal for penny-pinching start-ups)

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