The best way to buy a new Luton van for your business isn’t always clear. In this article we go through the pros and cons of Finance Lease, Contract Hire and Hire Purchase vs buying outright.
Choosing the right finance option for your business, whether you’re a sole trader, small business or a large enterprise, is vital. In the demanding business environment we live in today, making sure you choose the best finance option can give you an advantage over competitors who find themselves cash starved after a Luton van purchase.
Here are a few advantages to financing or leasing a new low loader van instead vs buying outright.
| ADVANTAGE | LEASING/FINANCING | BUYING |
| Lower up-front cost |  |
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| Brand new Luton van | |
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| Don’t have to worry about depreciation | |
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| Maintenance can be included (Contract Hire) | |
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| Better cash flow | |
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| You can sell your van whenever (also applicable to Finance Lease) | |
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| You own the van outright | |
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*At a significant cost.
As a business, there are three main types of finance that you will see when it comes to buying a new van. These are Hire Purchase, Finance Lease and Contract Hire. There are important differences between each of these finance options. You can find comprehensive information about each of these finance options by following this link.
Finance Lease vs Buying New Van
This is a decision that should first be made on whether or not you want to own your new Luton van. If you want to own the low loader van, then a Finance Lease isn’t the best option for you. However, there are other finance options which do give you that choice, such as Hire Purchase.
Pros Of Finance Leasing A Van |
Pros Of Buying A Luton Van Outright |
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Hire Purchase vs Buying Van Brand New
Hire Purchase is a great option for your business if you want to own your van without the strain of a cash purchase. Whether you are large, small or even a sole trader, if you are confident you want to own your Luton van at the end of your agreement, then HP lets you do that.
Pros Of Hire Purchasing A Low Loader Van |
Pros Of Buying A Luton Van With Cash |
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Contract Hire vs Buying New Low Loader Luton Van
Contract Hire is an extremely popular method of finance. Contract Hire agreements require a mileage limitation, but come with many benefits which make it an attractive option for businesses needing to operate a new Luton van without the stresses of owning the van.
Pros Of Contract Hiring A Low Loader Van |
Pros Of Buying A Luton Van With Cash |
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So what’s the verdict?
Each finance option has it’s own pros and cons that a business needs to weigh up.
For example, businesses operating in London (ULEZ Ultra-Low Emissions Zone) or any of the other new (CAZ Clean Air Zone) such as Derby and Leeds, having a EURO 6 vehicle is of utmost importance. Any van that isn’t EURO 6 will be charged £12.50 a day in the ULEZ, on top of the congestion charge of £11.50 if they enter London city centre between 7am-6pm on a weekday.
A business operating in the London ULEZ or a CAZ zone can be spending upwards of £3,500 extra per year by running a EURO 5 vehicle instead of a EURO 6 van.
This is a huge amount of money for each van, each year. For reasons like this, it can often be a savvy business decision to lease the newest vans with the latest engines, which adhere to the latest emissions regulations, under the bonnet to ensure you will never be paying for operating old technology.
Of course, for some businesses, buying with cash is still their preferred choice. For companies who rack up massive mileage (~30k+ per year), then a cash purchase works out much more economical than a mileage restricted finance option like Contract Hire.
Make the right choice for your business – you know your requirements better than anyone. Whatever decision you make, Maxi Mover are able to offer you the ultimate vehicle for the job.
