As an entrepreneur or small business owner, one of your main priorities will be keeping your expenses as low as you possibly can. Depending on your business, you might need to handle the transportation of goods or materials. In this situation, the question of leasing vehicles vs buying vehicles arises.
Each option comes with its own advantages and disadvantages, and you have to weigh up which option is best for your business needs. Leasing a van or vehicle is often a much cheaper option in comparison to buying one, or more, vans and vehicles.
One of the main reasons that a business owner would even consider the option of leasing, would be in an attempt to keep their expenses manageable. Fortunately, more and more businesses are opting to lease their vans and vehicles so there is a competitive market.
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Why Not Buy a Van?
The truth is that buying a new van isn’t always an option for a new business, just finding its feet. There are a lot of costs that are associated with owning a van that can really add to expenses. There’s always the option of buying a secondhand van, but this can be just as costly as buying a new van.
Aside from the big initial cost of buying the van, there are other costs that you have to consider. Should your business start to grow, you’ll have to spend more money to upgrade to the van you need. You’re also not likely to receive much back when you sell the van, particularly if you bought it second-hand.
Then there are the costs of maintaining the van such as taking it in for routine maintenance and servicing. You must also have an emergency fund ready in case the van breaks down or requires a big repair job. You’re more likely to spend a lot of money maintaining a second-hand van.
Finally, you’re the one responsible for making sure that your van is adequately insured. Some lenders may even require that you have comprehensive coverage before they will help you finance the purchase.
Benefits of Leasing a Van
It’s clear that buying a van may not be a great, or viable, financial decision for a new or small business. Leasing a van is the more beneficial option for several reasons that we’ll get more into below:
The main benefit of leasing a van for your fledgling business is the affordability aspect. Your business capital won’t take a hit when you make the decision to lease a van. With van rental, there isn’t always a deposit required. As long as you return the van in good condition, and don’t surpass the annual mileage, you won’t be charged extra.
On top of that, you won’t have to shell out a large sum to buy a brand-new or secondhand van. Instead, you’ll have reasonable monthly payments that you can easily fit into your budget. You’ll also have access to this van for about three years, in which time you can likely raise, or save, enough money to buy one.
You won’t have to worry about paying to maintain your work van if you opt to lease. Maintenance and servicing are typically included in the lease agreement. So while you’re signed onto your lease, the company you’ve leased the van from will be responsible for keeping it running.
Another expense that you won’t have to worry about when you lease is the insurance. The insurance will also be included in your lease, so you won’t have to worry about it.
Leasing a van provides you with certain flexibility that you wouldn’t have if you opted to buy instead. If the van you choose proves to be inappropriate for your business needs, you can always switch and upgrade. You can get a bigger or smaller van; you may also switch make and model. Either option should be permissible at any point during your lease, enabling your business to grow.
The costs and expenses can start to pile up when you’re starting a new business. The cost of a van doesn’t have to be one that keeps you up at night. The option to lease a van is an amazing one for small business owners. It’s affordable and allows you to have the flexibility you won’t get when you choose to buy.