Leasing a van for your business is a big financial commitment, and as such is a big decision to make.
There are many factors that need to be considered when leasing a van. Is the van suitable for your business? Can it carry out all the tasks that you need it to? Is the lease deal within the vehicle budget of your business?
Lease deals vary between leasing companies, sometimes by a large amount, and it is important to understand why. You should always shop around and look at different leasing companies to find out what they can offer, but be careful when comparing deals.
We’ve put together a few tips for you to consider when looking at van lease deals.
Like for Like
The first thing to look for is the vehicle model. Are you comparing the same exact make and model between lease offers? For example, the Ford Transit Custom has dozens of variants in production, and that’s before you look at optional features, colour schemes, or length and height differences.
Naturally, these vehicles won’t cost the same to lease, so don’t be fooled into choosing a cheaper vehicle just because the lease offer looks favourable. The cheaper offer may be missing some features that you would class as essential for your business needs.
Finance Product
Are the lease contracts the same? Comparing two lease offers won’t help you choose if they are different financial products. The most common lease agreements are made through Business Contract Hire, Personal Contract Hire, or Finance Lease.
Some companies don’t take much time to distinguish between the different lease arrangements, but they will all provide different quotes. Some will look cheaper than others due to initial payments or balloon payments, but be wary of choosing an offer with hidden costs, or with different terms that might not be favourable.
Finance Terms
The values on a van lease offer can be edited quite liberally if you adjust the variables. Lease length, expected mileage, and other options can impact the monthly payments significantly and give you an offer that looks great at first glance, but further investigation might turn up some cautionary terms.
For example, a large balloon payment at the end of a lease can reduce the monthly payments substantially. Some lenders will inflate the balloon payment beyond the expected value of the van, to keep payments low, which will leave you on the hook and needing to find a large lump sum at the end of the contract.
Stock Van or Factory Order?
When a leasing company offers you a “new” van, that could mean one of two things.
A stock van is one that is already at a dealer waiting to be purchased. So the colour and specification are already set. The advantage of a stock van is it can be delivered much more quickly. As it is already complete and ready to drive, the turnaround time from order to delivery is much shorter.
A factory order, however, is built to your specification. You can choose colours, features, and any additional extras you need for your business. It will take longer to be completed and delivered, but it will arrive perfectly customised for the job you need it to do.
These factors must be taken into account when comparing offers. Additionally, a stock vehicle might be an older model. Just because it has never been owned doesn’t mean it was built this year, and as such will not have the latest engine, or features, or MPG that an up to date model would have.
This also comes into consideration when looking at stock availability. Some manufacturers may have a lot of stock available, while others are limited in the options you can choose. A Ford van lease, for example, will be more easy to find a stock vehicle for than a Peugeot van lease.
Small Print
Various additional fees might be included in the lease, which the lender might not draw your attention to. Items such as delivery charges and admin fees will cause the lease price to creep upward and may push the deal out of your planned vehicle budget.
Look at the Details
Each of these factors can make the van lease offer look more or less favourable, and can make a bad deal look quite appealing. In our view, you should look for the companies that give you everything up front. Hidden charges are a sign that the leasing company is trying to make the deal seem better than it really is, and in that instance you can only lose out.
At the end of the day, this is a long-term agreement on a van lease that could well be your livelihood. A little extra care in the early stages could save you money and hassle further down the line.
