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Should my start up lease or buy a van?

Whether as a business or an individual, transport is an important investment.

However, for many small and medium sized businesses, especially start-ups, buying a van can be a stressful business decision. And the automobile market doesn’t exactly make things easy. There is a lot of choice, that’s for sure, but choice is not always a good thing. The ever present ‘deal’ and a wealth of durability and fuel efficiency data make it a minefield. But maybe buying isn’t the solution, maybe leasing is a better option? Either way it’s important to think through your decision. After all, this will be one of your most important assets.

Here we’ll discuss the pros and cons of buying and leasing.

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Buying

Let’s start with the downside: it’s expensive. You need to have the cash up front or you’ll need to finance it through a loan or some kind of smart buy. You’ve also got to consider depreciation and maintenance.

That said, there are some major benefits, the main one being that the van is yours. This brings three additional benefits:

  • The most obvious, you own something you can sell in the marketplace. This makes life easier if you need to upgrade. It also means you can recover some costs if your business idea doesn’t work out the way you wanted, or if you need a cash injection. You can read some tips on selling your van here
  • You’re not restricted by any contracts. The van is yours, you can respray it or modify it in any way you please. In a word, branding, and we all know how important that is
  • You can claim the cost of buying the van against your income tax bill. You might be able to claim the van as a capital allowance – speak to your accountant to find out more.

Leasing

The major upside to this is that you don’t need a great wad of cash to get started.  You’ll need a deposit, and then the rest you pay throughout the life of the contract. It’s like buying a phone. Reputable companies such as Mayday Vehicle Rentals can help with pricing and offer great deals on long-term leasing. They will also be able to talk you through the maintenance and breakdown options they have.

  • Maintenance costs should be covered by the leasing company, which is a huge weight off your mind if you’re just starting out
  • The option may exist to buy the van at some point. Ask about ‘lease purchase agreement’
  • The tax issues are similar, you should be able to write this off as a cost. Check with your accountant.

In summary, the best advice is to take the time to decide what is right for you. Don’t let the tail wag the dog. Get the van you need, the way you need it, and budget later.

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