As a self-employed driver, the decision to hire, buy or lease your van all comes down to one thing. How much capital you have!
Other factors should be considered as well like, how long you need the van for and what you’re going to be doing with it.
If you are using the van for trade purposes, you would not look to hire a van given the high risk of damage that could be caused to it and the charges rental companies will pass on to you for repairs. However, if you are looking at starting a career as a van driver, short term hire may be a good place to start to see if it is for you.
Buying
It is pretty simple: if you buy a van, you own it and you’ll have to pay for everything to keep it road legal and running. Buying outright with your own money is always going to be the most cost-effective way of running a van long term.
If you are looking to put serious miles on the clock, then new or new is the obvious choice when buying a van. Cash may hold you back here, so you have the option to finance the cost of the van and pay back in instalments. By buying a van, you are not restricted on the number of miles you can put on the clock. You also get to choose where and when you get repairs done allowing you to shop around. We would always recommend getting any damage repaired as your van represents you to your customers.
The downside of buying your own van is that it depreciates the moment you drive it off the forecourt and unless you take the maintenance package from the dealer, the repairs can be costly.
Leasing
Leasing is a simple solution for those who don’t have the money to buy a van outright. Another benefit for your business is that leasing is a fixed cost so helps with budgeting your costs
Like with mobile phones, when leasing a van, you will be tied to a fixed deal such as 3 or 5 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 expect you to pay a substantial amount as a balloon payment at the end of the agreement
The world of van leasing can be a complicated one. Putting it into it’s most simplistic form, you don’t own the van and that most arrangements come with fixed maintenance and breakdown packages. This removes the headache of paying for servicing. You can also decide to take an “all-in service” package from the lease provider. This means you’ll be paying the same amount every month, which is great for budgeting.
With leasing, 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. If you haven’t taken a service package out on your lease van, you must service the van on time and to the manufacturer’s recommendations.
Most leases have mileage restrictions, so bear in mind that they might not be for you if you are looking to be a van courier. Penalty charges on excessive mileage can be severe.
As with all things, read the terms and conditions carefully and don’t get caught out by an attractive headline. There can be hidden charges within the small print. Also, be aware of early contract termination. You may get left with a big bill. Unlike short term hire, leasing does not usually come with insurance so be sure to factor this cost into your budget.
Hiring
Short term van hire can be anything from one-hour to one-year.
Short term hire takes all the responsibility of owning or leasing away from you. You pay one fixed price and apart from fuel, just drive. Short term hire is the most expensive option of the 3 but comes with fewer clauses. You can hire the van for as long as you need it.
Summary
The decision of hiring, leasing or buying a van will depend on four important factors. Money, length of time you need the van, how you are going to use it and what level of involvement you want in maintaining the van.
For anyone looking to get a feel for a career in van driving, hiring a van is probably the best option. Leasing a van is typically preferable for medium to long-term usage. If you are looking to do thousands of miles a year and are looking to keep the van long term, buying is probably the best deal for you.
