BUYING new vans can knock a massive hole in your firm’s finances.
If you need, say, 10 Mercedes-Benz Sprinters, you are looking at a massive quarter of a million pound outlay – ouch!
And it’s no use thinking you can save cash by hanging on to your vehicles for longer. Any expert will tell you that a combination of higher maintenance costs and lower resale values will cost you even more in the long run. One unexpected breakdown alone could have disastrous consequences for your business.
Bearing in mind the number of van finance options available nowadays, it may seem surprising that around 63% of van operators still buy their vehicles outright and run them themselves, taking on the onerous tasks of purchase, maintenance, repair and selling them at the end of their lives.
Rod Lloyd, MD of our Best Small Fleet Van Leasing Award winners Low Cost Vans said: “Over the last six months we’ve seen a lot more trades choosing to opt for a lease that gives them use of the van, rather than ending up buying the van.
“It enables businesses to get a new van without paying the full capital cost, so budgeting is easier and leaves more cash to invest in the business.”
More and more operators are realising now that going for van ‘usership’ instead of ownership is the cost-effective way of running business vans and here we’ll explain in easy-to-understand language exactly what the benefits (and drawbacks) are.
The two main alternatives to buying your vans
The two main alternative acquisition methods available are contract hire and finance lease – and in both cases the best way to get your head around what they offer is to imagine them as glorified rental products.
As when you spot hire a vehicle from one of the big rental firms, you don’t actually own it, but pay to use it for a certain length of time – although of course you are responsible for the vehicle when it is in your care, so any penalties and damage will have to be paid for.
But the companies which offer contract hire and finance lease are far more than just people who provide vehicles for you.
Most of the bigger outfits have experts on board who can help you with all kinds of van management matters such as which vehicles to choose in the first place (very important as opting for a bigger van than you actually need can cost a lot of extra cash), which options to buy, and how to pay for your fuel.
In fact, it’s almost like having your own business van manager on hand waiting in the wings to sort out any problems you have – and it’s all included in the monthly charge.