When you set up your business, how you acquire your van is one of the major financial issues to be decided. We know that every business is different and has a unique set of circumstances, so the answer to buy or lease your business van is, it depends.
Even if your decision on how to finance a business van is clear at the start-up stage, it’s quite possible that your finance needs change and grow with your business; your view of whether to buy or lease your business van could well evolve over time.
Why should you buy your business van?
Even for a small business entrepreneur just starting out, outright purchase is generally an attractive option – under specific circumstances. These include the ability to afford a major capital outlay, and being sure you want to retain the vehicle for well over three years. Full ownership of your company van gives you the freedom of unrestricted mileage and the ability to sell it on whenever you wish. Moreover, outright purchase normally entails ongoing support you can rely on. For example, the purchase of a Renault van comes with a four-year warranty, plus roadside assistance. The tax advantage is that you can claim a capital allowance – i.e. deduct some or all of the value of from profits before paying tax.
And why not buy your business van?
An outright purchase makes it more difficult to budget costs, as repairs and maintenance are unknowns. You have the added hassle of insurance, road tax, an MOT certificate and the depreciation of your asset.
Advantages of leasing your business van
Leasing advantages are a mirror image of the disadvantages of purchase. Budgeting is more reliable, repairs and maintenance are taken care of, and monthly payments have tax advantages. After the lease period, you are without any liability and free to lease again or move on to a different solution.
Leasing flexibility tailored to your needs and circumstances
When you lease your business van, there are lots of options which you can match to your changing situation. With Renault Business Finance, for instance, you can take your pick between Contract Hire, traditional Hire Purchase, Finance Lease and Lease Purchase. Choosing one of these methods represents extra flexibility on the details of your lease, including how much deposit you put down at the beginning, how much your monthly payments will be over what period, and whether to opt for a package that takes care of everything including road tax. You can also choose the option that’s right for your business plan reagarding whether to return, retain or even sell the vehicle.
Options for leasing your business van, flexibility for your business
Different entrepreneurs are going to favour different solutions. For a small business owner who really wants to concentrate purely on building their business, Contract Hire could be the best choice; if your business plan involves acquiring more than one vehicle over a space of time, Hire Purchase could meet your needs. For a business start-up where you want to keep your options open, Finance Lease works well, and you should consider Lease Purchase if you need ultra-low monthly outgoings with a “balloon” payment at the end.
Overall, it’s horses for courses. Good luck with picking your winner!