Should I buy or lease a van?

Date Posted 1st February 2021
Read Time 6 min read

The time has come for a new van, but now you’re faced with the decision – should you buy or lease it?

A van is an important investment, so choosing how to purchase it is just as important as choosing the van itself.

You may think that the decision depends on your financial situation. And a large part of it does. But there are many different factors to consider when it comes to deciding whether buying or leasing is right for you. 

What’s the difference between buying and leasing a van?

Buying a van is fairly straightforward. You either pay for it upfront and own it straight away or spread the cost with a hire purchase finance agreement and own it once all the repayments have been made.

Van and keys

Leasing, on the other hand, is a little more flexible. 

When you lease a van, you don’t own it. Instead, you pay low monthly payments over the course of your term – which is usually two to five years – and in exchange get full use of it. It’s  like van rental, but over a longer period of time. 

Then, when the lease is up, you hand the van back and walk away. You’re then free to pick a new van and start a new lease deal if you wish. 

Saying that, there are other types of finance which give you similar freedoms as leasing but you can choose to purchase the van at the end of the agreement for a lump sum.

These include personal contract purchase and lease purchase. 

What are the advantages of buying a van?

When you buy a van, the main advantage is it’s completely yours. You’re not restricted to a mileage limit and, as long as it’s not on finance, you can do what you like with it – modify, trade or sell. 

If you’re running a business, it becomes an asset.

Row of vans

If you’re a cash buyer, the van will be cheaper, as there are no interest fees. It also doesn’t matter if your credit score isn’t great, because you’re not borrowing any money or needing to take out a credit agreement.

Of course, not everyone has a lump sum of cash to buy a van, and even for some that do, it makes more sense to finance the van for cash flow reasons. 

But if you own the van, it means you have something to trade in on your next one to lower the cost. 

What are the disadvantages of buying a van?

While owning the van is a big advantage of buying over leasing, it can also be a disadvantage. 

With ownership comes responsibility. And those responsibilities can be costly. 

You’ll need pay for maintenance, tax, servicing and insurance continually to keep your van legal and in good condition.

Depreciation is a factor, too. As soon as you become the registered keeper it’ll start to lose value. That can be an issue when the time comes to sell up or trade the van in.

What are the advantages of leasing a van?

Leasing a van is an affordable option for those who don’t have the money to buy a van outright or don’t want to invest such a large sum into a depreciating asset. 

It’s ideal if you want to pay a low, fixed monthly amount to fit in within your budget.

Another big advantage of leasing is that you don’t have the burden of ownership. At the end of the lease term, you return it and walk away. And when that time comes, you can start a new lease. 

Man in van

Most lease deals can also come with maintenance and breakdown packages. This is included in your monthly payment and it means there are no surprise costs lurking if you need a service or new tyres, for example. 

And because lease deals are usually available on brand-new or nearly-new vans, they’re normally still under the protection of the manufacturer’s warranty. Meaning you can enjoy your van without the worry of a big repair bill. 

As well, if you’re leasing a van for a VAT registered business, you can claim up to 100% of the VAT back from your monthly payments and maintenance package. 

Disadvantages of leasing a van

Like any decision, there are also disadvantages of van leasing. And you need to be aware of them before you sign up. 

One you should know is that a lease deal comes with a mileage restriction. You set how many miles you think you’re going to cover each year at the start of your agreement and at the end, it’s checked. 


If you’ve exceeded your mileage, you’ll face a pence-per-mile charge. 

The same applies to any damage to the van. Essentially you need to return the van in the same condition you received it, minus fair wear and tear. 

So, any modifications or anything above and beyond the usual wear and tear could mean extra charges at the end of your contract.

Finally, if you don’t have a good credit rating, you could find it hard to either be approved for a lease or get a good interest rate. 

And if you can’t get a good deal, it would mean paying larger monthly instalments for the lease of your van.  

Should I buy or lease a van? 

Whether you buy or lease a van ultimately comes down to what makes more practical and financial sense for you.

It’s a good idea to think about how you’re planning on using the van and whether owning it is important for you. 

If ownership isn’t a factor and you’d prefer to drive something new with the option of changing every two or three years, a lease deal would be a better option.

However, if you want to own your van outright, leasing isn’t something that’ll help you achieve that. 

How do I lease a van? 

If you’ve decided that leasing is right for you or you want some more information before you make up your mind, you can read our complete van leasing guide here. 

Alternatively, if you’re ready to start your lease journey, you can secure your finance pre-approval in minutes without affecting your credit score. 

Just fill in our short Apply Now form and we’ll find the right lender for you – even if you don’t have perfect credit. 


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