What Does Your Choice of Van Say About Your Business?

Remember Del Boy Trotter’s Reliant Regal van? That hideous yellow plastic tricycle was the anti-hero of the BBC’s Only Fools and Horses show, endlessly belching black smoke onto the main streets of Hackney. And yet the Trotter’s Independent Traders van wasn’t just a three-wheeled punchline – it was a painfully accurate reflection of what small businesses across Thatcher’s Britain had to do to keep mobile… not to mention a painfully accurate reflection on the quality of business itself.

Reliant Regal van

photo credit: Wikipedia

The Reliant Regal was never a popular workhorse, but plenty of people struggled through the Eighties in clapped-out Morris vans or Mark 2 Transits with their doors tied shut using string. Even today, there are sole traders and small businesses across Britain limping on with arthritic vans that deserve a dignified retirement. Problem is, if your bank account is constantly being drained to pay suppliers, and your bank manager’s reluctant to hand out a generous loan, how can you park a shiny new van outside your premises?

One answer involves van leasing. This has become popular thanks to today’s ultra-low interest rates, giving people the keys to a new vehicle without requiring huge deposits. Many van lease agreements only require three monthly payments up front, which doesn’t seem much to ask for a brand-new commercial vehicle with delivery mileage and pristine paintwork.

Drawbacks of Van Leasing

Of course, business van leasing does involve significant costs. Monthly repayments are sometimes lowered by creating a balloon payment – a large one-off fee at the end of the agreement. It’s also important to remember that the van doesn’t belong to you at any point – when the final payment has been made, the provider will come round and collect the keys. That means it’s time to find a new deal, though many leasing firms offer deals to existing customers to keep them on board.

Advantages of Getting a Business Lease for Your Van

So those are the drawbacks – what are the advantages? Apart from taking delivery of a shiny new van every few years with the latest creature comforts like sat-nav and DAB, a lease agreement spells out in advance how much the van will cost every month. That avoids the one-off shock of a cash purchase or final ownership payment. If your expenses are fairly consistent, it’s easier to budget accurately and charge clients enough to cover your firm’s operating costs.

Leasing can be tax-efficient, too. If you’re VAT registered, expect to receive twenty per cent of your lease costs back as a refund. Even if you’re not, this is an allowable business expense that lowers your taxable profits. And either way, it’s possible to choose a maintenance-inclusive deal that means everything from punctures to services are paid for by the company supplying the van. All you have to do is insure and fuel it. And avoid painting it yellow with a rude word written on the sides.

Conclusion

It is always important to remember that leasing a vehicle is not always for everyone, it merely depends on your current financial situation and how quickly you need your vehicle. In the end, no leasing company can deny that a leasing option is more expensive in the long run, but if you need that brand new vehicle asap, particularly to positively reflect your business, then leasing may be for you.

Always remember that you have the option to negotiate pricing, which it is always best to do this right from the beginning. This is important, because leasing companies have their negotiations between the manufacturer and finance company in order to get the best possible deal for you, so providing this information up front can save a lot of time and money.

 

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