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Here we take a quick look at the pros and cons of buying or leasing a new van:

Buying a van – the pros:

  • When you buy the van outright, it becomes a business asset and can add value to your business.
  • No monthly instalments to worry about.
  • It can be sold if you need capital.
  • You don't have to worry about keeping the van in a particular condition.
  • You can drive as much as you want as there won't be any mileage constraints.

 Buying a van – the cons:

  • Finding a lump sum to buy a suitable commercial vehicle can be difficult, particularly as a start-up.
  • You may have to opt for a second-hand vehicle.
  • Depreciation means you won't get back what you paid for the van, if you need to sell it.

 Leasing a van – the pros:

  • You can have a brand new van for a fixed monthly cost.
  • You get a new van every few years (usually 2 – 3 years).
  • No depreciation.
  • You may be able to add a maintenance plan to your monthly instalment so you don't have to worry about emergency repair costs.
  • You may be able to add special van insurance products to your leasing plan, such as scratch repair and wheel damage cover.
  • Monthly lease payments can be claimed as a tax-deductible expense for VAT registered businesses. 

Leasing a van – the cons:

  • You don't own the commercial vehicle, it goes back to the lease company at the end of your leasing agreement.
  • There may be a restriction on the number of miles you can drive during the lease agreement. High mileage might increase the monthly payment you have to make. 
  • There may be penalties for returning a leased van in poor condition.

Van insurance considerations

Whether you lease or buy your van, one factor to consider will be the van insurance requirements.

Commercial vehicle leases will require comprehensive insurance as standard (although, as a van insurance company, we would always recommend comprehensive insurance as preferable if you can afford it.)

The price you pay for your van insurance, whether you lease or buy, will depend on a number of standard factors such as the age of the vehicle, the base value of the van, repair costs, and other factors such as whether you require any driver van insurance, under-25 van insurance or whether you wish to insure the vehicle under a fleet van insurance policy.

As with all van insurance deals, research is key, so our advice when deciding whether to lease or buy a van, is to add the insurance costs as a factor to explore.