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November 20, 2020 at 9:05 AM

 

If you are running a business that calls for the use of vans, finding a resolution about where to acquire them can be a challenging task. Whether you need a single van, or a fleet, you have a number of options to consider and purchasing, hiring or leasing is usually the first question business owners need to ask themselves.

In this article, we focus on the growing option of leasing. To help, we’ve collated for you options to consider and their respective advantages and potential risks.

Before you begin though, you should be clear on what your needs are, the frequency of use, the likely mileage during the next 12-24 months and most importantly, the overall safety of your employees.

Second Hand Van Leasing

Van lease or contract hire is an arrangement that is set within a specified time in which you make monthly instalments of an agreed amount. Some dealers may require you to pay a deposit, but the size of the deposit and the length of the term is often negotiable.

Having monthly contracts might not be practical if you do not have regular daily deployment - so it would be counter-productive to enter into a leasing agreement - a daily hire arrangement might be a better option.

If the need is to deploy people and products regularly, then leasing or outright purchasing are good options - the decision often comes down to the funds you have available for a purchase v’s the deposit for a lease agreement.

Before making a final decision, take into consideration the financial status of your business.  It is also worth looking at the total cost of ownership, potential benefits and any return on investment you might get.

Used Van Leasing: Deposits & VAT 

There are several considerations for used van leasing. Primarily, leasing offers a considerable amount of cash flow release compared to buying outright - minimising the cash strain on your company early on. Another benefit of leasing used vans is the accumulation of tax-deductible lease payments. That is another reason that leasing is growing in popularity.

If you prefer to pay in cash, you are obliged to pay for the VAT of the leased vehicle upon usage. Obviously, the more expensive the van, the bigger the VAT payment. In most cases, the deposit value is usually 10% of the vehicle’s leasing value. To lighten your burden, you can negotiate to spread the deposit and/or VAT payments across your monthly instalments.

Either way, dealers and lease providers are often open to discussing deals that work for both you & them.


Van Leasing 

Just like everything else, van leasing comes with its own set of advantages. Here’s a closer look at some of them.

  • Monthly rates with little or no deposit. When a leasing agreement is closed, a pre-agreed monthly cost and deposit is paid. Depending on the deal you’ve negotiated, the deposit may well be waived altogether. Typically payments are on a Direct Debit base on a set date each month. Make sure to understand what penalties apply for what reason - late payment & excess mileage are the more common traps to be aware of
  • Flexible terms. If, within the agreed lease agreement, you need to upgrade your fleet or make changes to the lease agreement, talk to the original service provider - there is often a clause which discusses what flexibility you have, so make sure you are clear in advance and  based on your expected requirements during the lease term, of what flexibility you have.
  • Fewer worries. With van leasing, as the vehicle is new, you do not need generally don’t need to worry about repairs as everything is covered under the warranty.  You also have the option to include service, maintenance & tyre costs.  At the end of the term, the vehicle is returned, so you don’t have to worry about the eventual depreciation of the vehicle’s value nor have to go through the hassle of selling or trade-in negotiations. And, assuming there is only normal wear and tear to the vehicle, no costs are incurred. If you do have damage, defects or malfunctions it is best to report this to the service provider as they occur.
  • Range of van choice. The great thing about van leasing is that the latest and most popular van makes or models are generally available for lease. Of course, the more spec’d the vehicle, the greater the cost, so it’s best to be realistic about your needs and finances.
  • Business benefit. Your investment in van leasing is tax-deductible. This can help you gain a significant amount of savings in the long run - maybe leading to purchase in the future if this would be your preferred long term option

While van leasing does offer a lot of benefits, there are also notable disadvantages to consider:

  • Ownership. Any vehicle you lease is owned by the lease company and there is not usually an option to purchase the van at the end of the term, but it does mean you can enter a new lease every 2-3 years!
  • Mileage. One of the big considerations for leasing is the mileage allowance.  You need to be clear on how many miles you expect to do during the term of the lease.  Agreeing too little mileage may result in lower monthly costs, but if you exceed the amount you anticipate, you will be subject to additional mileage fees.
  • Early termination. If you need to terminate your leasing contract early, there will be a redemption fee. The exact price is pre-determined in the agreement.

New Van Leasing

Aside from second-hand vehicles, new vans are also available for leasing. The process of van leasing is rather simple. You just need to find a reliable and trusted vehicle dealer, choose a vehicle or fleet of vehicles, solidify the leasing terms, pay the agreed monthly instalments and return the vehicle at the end of the agreement.

With that in mind, it only takes five steps to start this venture. When it comes to choosing the make and model of the vans, make sure they will fit the purpose it is intended to do. After that, negotiate a deal that will prove beneficial for you and the vehicle dealer. After closing the agreement, the new van will be delivered to you. You get to drive and enjoy it in any way you can. When the lease agreement comes to a close, all you need to do is return the vehicle in good working condition. The process does sound simple because it is!

The only disadvantage of this, you shoulder all the repairs if you are in an accident or any malfunctions. New vehicles are modestly used by the service providers. You have to be careful in handling them or you would have to pay more than what you have entered into.

In the end, whichever option you choose you to need to consider the finances of the company and the long-term implications that it has on your business and operations. Typically, van leasing agreements last for a year or two, depending on the initial agreement. You might want to consider being modest in the first few months before jumping to take a full-blown contract agreement with them. This way you have a leeway to assess if your current situation requires this and if there are other service contractors available that provide equally dependable service but at a more reasonable price. So choose. Do the research and take your time understanding your needs.

Costs Involved

When it comes to used van leasing and van sales in the UK, there are several costs involved that you need to be aware of. The first cost is the initial payment, typically a multiple of the ongoing monthly cost. In this case, you aren’t depositing because you won’t get it back. This payment is required upfront and can vary depending on the make and model of the van, as well as your credit score.

Another cost involved in used van leasing is the monthly rental fee. This fee covers using the van for a specific period, usually 2-5 years. The monthly rental payment can also vary based on factors such as mileage allowance and additional services you require, such as maintenance or breakdown cover.

Finally, at the end of your lease agreement, additional costs may be involved. These include any damages or excess wear and tear charges that may have been incurred during your time with the van. To avoid these charges, taking good care of your leased vehicle throughout its lifespan is essential.

Lease terms and conditions

In used van leasing, lease terms and conditions are essential to consider before signing on the dotted line. Leasing agreements outline the responsibilities of both the lessor (the company providing the van) and the lessee (the person or business leasing the van). Understanding these terms is crucial to avoid potential problems down the road.

Some key lease terms to pay attention to include mileage restrictions, maintenance requirements, insurance coverage, and early termination fees. Mileage restrictions are often included in a lease agreement because they help ensure that the van doesn't get overused or damaged. Maintenance requirements may include regular servicing at specified intervals to keep up with warranty requirements. Insurance coverage is essential for protecting both parties in case of any accidents or damage incurred during vehicle use. Early termination fees may apply if you need to end your lease early, so it's important to factor this into your decision-making process.

Qualifications

You must have specific qualifications before leasing a used SWB van. The first and most important qualification has a good credit score. This is because leasing companies generally look for customers with a good track record of making timely payments. A good credit score will also help you get better rates and terms on your lease.

Another qualification that you need to meet is having the proper documentation. You must provide proof of identity, employment, and income when you apply for a used van lease. This documentation helps the leasing company verify your ability to pay back the loan.

It's vital to ensure you’re prepared with all the necessary information before applying for a van lease so that the process goes smoothly without any delays or rejections due to missing documents or poor credit history.

Finding the Right Dealer

Before making your final decision about used van leasing, you should consider a few things. First and foremost, it's crucial to find a reputable dealer that has been in business for a significant amount of time. As a result, you can rest assured they have experience in the industry and can be trusted to provide quality vehicles.

Another thing you should look for is a dealer that offers a wide selection of used vans. This will allow you to choose from various models, makes, and years. So whether you’re looking for a Ford Transit van or a long-wheel base van, you can be sure to find the perfect van for your needs. Additionally, it's always helpful if the dealer has knowledgeable sales staff who can answer any questions you may have about the vehicles.

Lastly, read reviews from previous customers before committing to a specific dealer. This will give you an idea of what others' experiences were like and whether or not they would recommend doing business with them. By considering these factors, you'll be able to find the right dealer for your used van leasing needs and feel confident in your decision.

Avoiding Common Pitfalls

Used van leasing comes with some common pitfalls. Insufficient research is a common mistake before signing a lease agreement. It’s vital to take the time to understand the terms and conditions of your lease agreement, including mileage limitations and late payment fees.

Another pitfall to avoid when leasing a used van is failing to negotiate the lease terms. Many people assume that they have no bargaining power when it comes to leasing. However, you can always try your luck at negotiating with your leasing company for better rates or more favourable terms.

Finally, be sure to inspect your van thoroughly before signing any agreements. Check for signs of wear and tear, damage, or mechanical issues. Ensure that all necessary repairs are made before taking possession of your vehicle. By avoiding these common pitfalls in used van leasing, you can save yourself money and hassle down the road while enjoying all the benefits of having a reliable mode of transportation.

Why Lease a Van from Big Van World?

The best deals

Leasing a van from Big Van World is one of the best deals you can get if you need a reliable vehicle for your business or personal use. If you’re searching for a minibus for sale or medium vans for sale, you can rely on Big Van World. With a wide array of used vans, you're sure to find the perfect one that fits your needs and budget. We offer flexible financing options, making it easier for you to manage your expenses.

No hidden charges

It can be frustrating when you lease a van and get hit with hidden fees. At Big Van World, we understand how important transparency is for our customers, which is why we offer no hidden fees. When you lease a van from us, you will know exactly what you are paying for, with no surprises down the line.

Guidance from experts

Expert advice is essential when making a significant investment, such as leasing a van. Big Van World offers specialist advice to our customers, ensuring they make informed decisions that meet their specific needs. Our team of experts has in-depth knowledge and experience with vans, enabling us to guide customers on the best van for their business requirements.

 

Leasing Vans for Business

Want to get the best price deals for van leasing? Check out Big Van World. They offer a wide collection of used cars and vans of various models, makes and prices that are updated daily. Every day, there is a deal that will be sure to fit your needs. 

If you want to learn more about leasing used vans for business or personal use, why don’t you talk to the experts at Big Van World today? You can make a general enquiry, get a quote on a van of your choice or grab a limited offer as soon as they are out. You can contact them on 01793 751866 or fill out their contact form here.


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