We’ve got several guides designed to explain leasing a car as a business but we know that when your company needs a light commercial vehicle or van your needs as well as the process can be a little different, which is why we’ve put together this helpful guide to business van leasing.
How Does Leasing a Van Work?
Leasing a van works the same way that leasing a car for your business does though there are a few additional factors that you need to be aware of, which we will cover in this guide.
A lease is a long-term rental agreement between you and a funder that allows you to use the van for a set period of time at a fixed monthly price.
As part of the agreement, you will also agree to a mileage allowance, but most funders will be able to amend this for you once during the contract if you are doing more or less than expected provided you are not already at their limits.
Benefits of Leasing a Van
1. A new reliable vehicle every few years
2. Choice of all models and spec available on the UK market
3. Ability to customise models to your needs
4. Flexible contract lengths from 24 to 60 months
5. Optional maintenance packages that provide you with essential maintenance services with the call of just one number
6. Claim back up to 100% of VAT on lease payments
7. Low monthly payments are easy to budget for and avoid large upfront costs for the business
8. Road tax is paid by the funder
9. Ability to add your own signage to the vehicle
10. No vehicle depreciation concerns
What Kind of Van Can You Lease?
At Wessex Fleet we can help you source any van that you are looking for. Just like with cars we work with dealerships across the UK to find in-stock vehicles at excellent purchase or lease prices.
We can also help with more specialised vans as well. Over the past 15 years, we’ve worked with professional converters in order to be able to provide you with vans that have been adapted for the food service industry, as well as specific fridge vans.
If you need a modified van then please give us a call on 01722 322 888 and we’ll be able to help you find a vehicle that meets all your needs.
Lease Financing Options
There are a few different ways that you can finance a new van for your fleet, and you can find a comprehensive list of them all here.
The two methods that are currently available for business van leasing are business contract hire and finance leasing.
Business contract hire (BCH) is a type of leasing that is specifically designed for businesses.
It offers you the flexibility of choosing a contract between 24 and 60 months whilst also giving you the stability of fixed monthly payments.
As part of the agreement, you also agree to a set contractual mileage and though this can be amended if you find you’re doing more or less than expected this will usually have an impact on the monthly payments so we recommend trying to be as accurate as possible when deciding on what mileage would be best for you.
Another thing to be aware of with a BCH contract is that you will not have the option to purchase the vehicle at the end of the lease as you do with some of the other funding methods. So, you’ll need to bear in mind that the vehicle will need to be handed back at the end of the contract in line with the BVRLA’s fair wear and tear guidelines.
Finance leasing is similar to business contract hire in that it lasts a set period of time and there are fixed monthly payments.
However, you have a choice with what you do at the end of the lease agreement in a finance lease.
You can return the vehicle to the funder to be sold, sell it on behalf of the funder to a third party or enter an agreed second lease with a peppercorn rental.
With a finance lease there are also slightly different payment options. You can either pay for the cost of the lease evenly over set monthly payments or you can opt for lower monthly payments with a final balloon payment at the end of the agreement.
An added benefit of opting for a finance lease is that while it remains the property of the funder it will show as an asset on your balance sheet.
If you are looking to add to your fleet and are unsure if leasing is the right method of funding for you then take a look here to see the other methods of funding available.
Maintenance of a Lease Van
The maintenance a van requires is different to the maintenance that a car in your fleet will need, and this is due to the different vehicle design, size and shape as well as the use of it and the weight it is required to carry.
If you decide to lease a van for your business then you might also want to look at adding a maintenance package to the leasing agreement, which will cover the general maintenance of the vehicle, replacement perishables, servicing and any MOTs due during the contract.
We’ve got a full guide to maintenance here or you can give us a call to discuss the maintenance packages that Wessex Fleet is able to offer you on 01722 322 888.
Signage
Many businesses choose to have their van decorated with signage advertising their business.
You can still apply personalised signage to a lease vehicle provided that it does not damage the paintwork. If you choose to lease through Wessex Fleet then we can arrange this for you.
Please note that you might need to remove the signage from the van before returning it to the lease funder. We can arrange for this to be removed as well for you but there may be an additional fee for this.
The End of Lease Process
When you reach the end of your contract you will need to return the vehicle to the lease funder.
The BVRLA have guidelines on the condition that a van can and should be returned in, and these also contain guidance on fair wear and tear to the vehicle during the contract period. We can provide you with information on these on request, and you should also receive a copy of the funder's guidelines with confirmation of the collection booking.
If Wessex Fleet arranged your lease or we manage your fleet then you will just need to get in touch with us and we can arrange for collection of the van for you.
For more information on the end of lease process and how to arrange collection just click here.
When you near the end of your lease agreement we will usually be in touch with your internal fleet manager to discuss the options available for that particular vehicle. Whether you decide to replace the vehicle with a new model or not you will need to arrange collection of the van and we can work with you to arrange this closer to the end of the contract.
Insuring a Van
Many of our clients have a fleet leasing policy and if you have only had cars on this policy before then it is worth checking with your insurance provider that this policy will also cover you for a van as they are classed slightly differently by most providers.
Depending on the use of the vehicle as well you might want to consider additional insurance if you are transporting goods to provide additional cover for the goods as well as the vehicle.
Tax Concerns
Just as you don’t with a lease car you won’t need to pay road tax on a lease van as this will be covered by the funder for the duration of your lease, at the price it was initially taxed.
You can claim back up to 100% of the VAT costs for the monthly rental payments, depending on whether the vehicle is driven for personal use as well, and you might also be able to claim back any VAT on the maintenance payments and end of lease excess mileage charges.
Another tax concern you might have if the vehicle is to be used as a company car by one of your employees is the company van tax. We’ve got a full guide on this for you and another for your drivers to explain company van tax, just click on one of the links above to go to the correct page.
