Leasing a van for your business
For many tradespeople, the van is where the working day starts. Leasing one means driving a newer van for a fixed monthly cost, then handing it back at the end. This page explains how a van lease works for a sole trader or small firm, and how to get the most from one.
How a van lease works
Vehicle leasing is a long-term rental. You use a car or van for a set period at a fixed monthly price. With contract hire, the leasing company also takes on some of the management and maintenance, such as repairs and servicing.
The van belongs to the leasing company throughout. You are responsible for insuring it at all times. You will not be able to take the van until the insurance is in place for the day it is collected or delivered.
Choosing a mileage
The monthly payment is based on how long the contract runs and the mileage you expect to do. If you go over the agreed mileage, you pay an excess mileage charge. The charge per mile is shown in your contract.
A realistic estimate at the start keeps the end of the lease simple. If you are part way through and heading over, the contract tells you what each extra mile will cost.
Servicing and upkeep
You may be able to add a maintenance package to the lease for a fixed monthly cost. It covers servicing, replacement tyres and other parts that wear out. That turns the van's running costs into a known monthly figure.
Fitting out the van
Because the van belongs to the leasing company, you cannot modify it without its permission. The British Vehicle Rental and Leasing Association (BVRLA) gives fitting a tow bar as an example of something to ask about first. Taking a leased vehicle abroad also needs a VE103 certificate, which shows you are allowed to drive it there.
Electric vans and your licence
A car driving licence for a test passed on or after 1 January 1997 covers petrol and diesel vehicles up to 3,500kg maximum authorised mass. For electric or hydrogen vehicles, the limit is 4,250kg. That gives more room for a heavier electric van on the same licence.
Handing the van back
At the end of the lease, the van is assessed. The check can cover damage, excessive wear and tear, missing equipment, the service history and the mileage. Anything outside the agreed guidelines may lead to extra charges.
Fair wear and tear is the ordinary deterioration that comes with use. Damage is different. It comes from a specific event, such as an impact or items stowed badly in the back. When the van is collected, you and the leasing company's representative check its condition together and both sign the record.
Before you sign
The Financial Conduct Authority (FCA) runs a register that shows whether a firm is authorised. BVRLA members work to a mandatory code of conduct, and the BVRLA runs a dispute resolution service for their customers. The Financial Ombudsman Service is free and looks at complaints about financial businesses from individuals and small businesses.