What is the Difference?
Buying a van is pretty self explanatory; you find the cash from somewhere (a loan, personal funds, hidden in a mattress etc) and pay outright. Voila: the van is yours to keep. With leasing, there are a couple of options. One is that you pay a monthly fee in order to lease the van. The second option is that – after a predetermined lease period – for example, two years – you are given the opportunity to buy the van outright.
Advantages of Buying
The main benefit of buying a van outright is that it tends to offer good value for money, provided your business can afford the up front payment (which can be substantial). You may even be able to get a slight reduction on the sale cost if you are able to pay in cash. As well as this, you’ll not be restricted to a certain mileage limit, which some hire companies may impose upon van lease agreements. Most importantly though, you have the freedom to trade, sell or do whatever you see fit with the van.
Advantages of Leasing
There are a number of freedoms that make leasing an attractive option for businesses. For example, some businesses will not require a permanent company vehicle, in which case buying a van outright would be a massive waste of company money. Likewise, there are not maintenance costs associated with hiring a van as these are generally always included in the lease. For businesses that may need more than one van, this is of course a big money-saver. Finally, the fact that most good lease companies (such as Hitachi Capital) will give you the option of buying the van after the end of the lease period, means that you’ve effectively got the best of both worlds.
Making Your Decision
Ultimately, the decision comes down to how you intend to use the van. If you’re looking for a long-term vehicle and are prepared to pay the up front cost and the ongoing maintenance, purchasing is probably for you. But if you prefer the gradual payments, zero maintenance costs and the option to buy afterwards, leasing is a no brainer.