Is it best to hire, lease or buy a company van?
We highlight the reasons to rent a commercial vehicle!
Deciding whether to hire, lease or buy when you need a van for your business can be a big decision. There are advantages and drawbacks to each approach in terms of costs, convenience, and practicality.
To help you decide on the best outcome, we outline the key differences between hiring, leasing and buying a company van. Whatever your commercial vehicle needs, there are certain factors you should weigh up first. Read on to find out more…
Is it better to hire, buy or lease a van in the UK?
Whether you’re a sole trader, small business owner or in charge of a large company, access to commercial vehicles can help drive your business forward. But is it best to hire, buy or lease a van? Below, we highlight the pros and cons of each option:
Hiring a van - advantages and disadvantages
- It proves to be the cheapest short-term option
- You can select a van to suit your needs
- No concerns about maintenance costs
- Latest models available to choose from
- Prices can increase for un-planned long-term use
- You won’t own the van
Buying a van - advantages and disadvantages
- Spread the cost through finance solutions
- You can modify the vehicle as you wish
- A chance to build equity in the asset
- You’ll be able to part-exchange it for a newer model
- Upfront deposits can be costly
- You’ll be responsible for the ongoing maintenance
- A chance the vehicle could depreciate in value
Leasing a van - advantages and disadvantages
- Lower monthly costs to pay out than purchasing outright
- Vehicle maintenance can be included
- An opportunity to regularly upgrade your van
- You won’t own the vehicle
- Mileage limits may apply and exceeding these will result in extra fees
- Early termination fees are applicable
Hiring, buying or leasing a van - which option is best for me?
There's no outright winner here, of course it all depends on your needs and circumstances. Before making a decision, determine your budget, usage, and if van ownership is important to you. If not, it may be that a more flexible agreement with a lower commitment is the ideal option.
Van hire or lease tends to suit startups and smaller businesses, while established companies making regular use of vans may wish to buy and invest in a fleet of vehicles.
Why should I hire a company van?
If the idea of hiring a company van ticks your boxes, then read on to find out five reasons why hiring a van is generally the best option compared to buying or leasing a commercial vehicle:
1 - Flexibility
Hiring a company van means you can be very adaptable to suit the needs of a particular job or transport requirements. Plus, you will only pay for the exact duration needed. Remember that you can easily upgrade or downgrade the model or size of the van too.
2 - Lower Upfront Costs
Hiring a company van doesn’t require a large deposit, like leasing or buying one would. As long as you look after the van carefully like it’s your own, there won’t be any hidden costs when returned in the condition it was given to you.
3 - Less Financial Risk
Hiring a company van means your business cash flow faces less strain from ongoing finance repayments or the depreciating value of a purchased van. Benefit from hire feed with fixed rates and no obligations.
4 - Convenient
Hiring a company van means that the responsibility of maintenance, insurance, and breakdown assistance is down to the rental company. As a customer, you simply collect and return the vehicle without hassle.
5 - Tax Benefits
Hiring a company van qualifies as an expense and can 100% be claimed against tax, which is not necessarily the case when buying or leasing. Do your homework first.
Find out why hiring a company van is better compared to leasing or buying it…
Hire vs Leasing
- Hiring - Pay fixed rental rates only for the days or weeks it is used
- Leasing - Ongoing monthly payments for the duration of the term (on average 3-5 years)
- Hiring - Opportunity to cancel at short notice
- Leasing - The contract is hard to exit early and fees will likely apply
- Hiring - A pre-defined mileage allowance is usually put in place
- Leasing - Exceeding mileage can rapidly escalate costs
- Hiring - The rental company covers all servicing and repair requirements
- Leasing - Repairs may remain your responsibility
- Hiring – Select a new van depending on the job at hand
- Leasing – You’ll be stuck with the same vehicle for the full term
- Hiring - As long as the van is returned in the same condition, there is no liability
- Leasing - Any damage above standard wear and tear incurs further fees
Overall, hiring a van offers more control over costs, fewer long-term risks, and greater convenience than being locked into years-long van lease agreements. If your transport needs vary over time, hiring a van on a pay-as-you-go basis is likely the most suitable option.
Hire vs Buying
- Hiring - Usually only rental fees apply so you won’t pay a deposit
- Buying - It’s likely a large downpayment will be required, even if you source finance first
- Hiring - Secure fixed rental rates which may be preferable when renting long-term
- Buying - Consider extra running costs like tax, insurance, maintenance and repairs
- Hiring - Opportunity to upgrade to alternative models with better features
- Buying - Only possible if you sell the vehicle privately or part-exchange it at a dealership
- Hiring - A 100% tax-deductible expense for your business
- Buying - Partial tax relief opportunities may be available
Hiring a van offers much more flexibility compared to buying which demands long-term planning and cash flow commitments. The hassle-free nature of rentals with no ownership risks keeps costs predictable for small businesses, therefore making it more appealing.
Short and long-term van hire at Rent Direct
Here at Rent Direct, we specialise in providing sole traders, small businesses and fleet operators with the vans to keep their business moving in the right direction. We offer short-term and long-term van hire solutions that are flexible and designed around your needs.
We have van rental branches located across East Anglia and proudly serve companies right across the UK. To book, use the online form found on our homepage, or for more information, get in touch and we’ll be happy to discuss your options and provide a no-obligation quotation.