Is it best to hire, lease or buy a van?

The decision to hire, lease or buy a van will often depend on one key thing: how much money you have.

However, there might be other factors, too, like how long you intend to use the van for and what you're going to be doing with it.

If you’re working in construction, for example, it’s unlikely that you’ll want to hire a van, given the high risk of damage when on-site and the high prices that you’ll have to pay to repair any that's done. Equally, if you just want a bigger or smaller van to complete a specific job, you’re not going to buy one outright.

So, what's the best solution for you? Read on for our tips on deciding the best way to get a van.

Buying

It’s pretty straightforward: if you buy a van, you own it and you’ll have to pay for everything related to its upkeep. Buying outright with your own money is always going to be the most cost-effective way of running a van in the longer-term.

Of course, not everyone can afford to buy a van for cash, so you’ll often have some kind of finance agreement to consider as part of the purchase.

Nevertheless, this can still be the best buying method for many people. You’ll own the vehicle for its entire life, you can negotiate the price to get a better deal and you can trade in an older vehicle if you own one. Furthermore, there’s no restriction on where you can drive it or how many miles you can do, plus there are fewer tax implications.

The downside is that you’ll have to pay for maintenance, tax and insurance yourself and keep on top of them all in order to keep your van in the best condition.

Also, if you damage the van, you can choose to shop around for the lowest repair price or just leave it and save yourself the money – although we wouldn’t recommend that, because it doesn’t present a very good image to your customers.

Don’t forget about depreciation either, as your van will be losing value throughout the time you own it.

Leasing

Businesses like leasing, because it allows them to work with fixed costs. Leasing is also a simple solution for those who don’t have the money to buy a van outright.

Leasing a van means you’ll be tied to a fixed-term contract, just as for many mobile phone customers, usually covering a period of three to five years. However, unlike with most phone contracts, you won’t own the van at the end of the agreement, and if you do want to purchase it, some agreements (lease purchase) will make you pay a substantial amount as a balloon payment at the end of the lease period.

There are many types of lease, and it can be a complicated world, but the basics are that you don’t own the van and that most arrangements come with fixed maintenance and breakdown packages. And if you opt for an all-in service from the lease provider, you'll be paying the same amount every month, which is great for budgeting.

Having a leased van also saves you on maintenance costs later down the line, because your new van will be under warranty and likely fully covered by the arrangement. Once the contract finishes, you simply return the van and can get a new one, which means there's no danger of any surprise repair bills once out of warranty. You must, however, service the van on time and to the manufacturer’s recommendations.

Leases have mileage restrictions, so bear in mind that they might not be for you if you cover a lot of ground.

Also be careful of penalty clauses. You might have to go through an approved supplier to repair any damage, for instance, which can be costly and attract administration fees from the lease company. Penalty charges on excessive mileage can also be severe.

Read the terms and conditions carefully and don’t get caught out by an attractive headline figure that ends up giving you less use of the vehicle than you require. If you need to terminate the arrangement early, you’ll also be left severely out of pocket. Most arrangements don’t include insurance, but shop around if you want this service, because some providers will offer all-in leasing.

Hiring

Hiring a van can mean anything from a single-day rental to a much longer-term arrangement.

Hiring a van is very similar to leasing one, except you're given even less responsibility for the vehicle. Insurance, servicing and even damage repairs will be taken out of your control. You pay a fixed price for simply driving away with the van, and everything except your fuel will be covered.

Hiring is more expensive than leasing, because contracts are more flexible. Short-term hire is usually by the day or the week, but even longer-term hire periods have very short return clauses, meaning you could send the van back and stop your payments very quickly were a job to fall through or end unexpectedly.

Summary

The choice between hiring, leasing and buying a van will depend as much upon your financial situation as it will the length of time that you want to use the van, plus the level of involvement you'd like to have in looking after it.

For short-term requirements, hiring a van is usually the easiest option, but a lease is typically preferable for medium to long-term usage. If you intend to keep a van for a very long time, buying is nearly always the best value for money – especially if you can get a good deal.

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