Buying a van

Paul Green, National Remarketing Manager, Wednesday, 13 July 2022
Updated: Thursday, 5 October 2023

For some of us, driving a van is essential to daily life. Whether it’s to transport goods, move tools and equipment between jobs, or simply pack up the family and head off on a weekend road trip, a reliable van is key to having a stress-free life on the road.

This guide explores the many factors you need to consider when buying a van. We’ll explore what you should think about, like the age, size, make, and type of van you need, as well as the different payment and van finance options available, so you can make an informed decision.

In this guide

What to consider when buying a van

To avoid ending up with a van that doesn’t quite meet your needs, you should ask yourself the following questions and explore your options thoroughly. This way, you can book test drives and commit to a vehicle, knowing you aren’t overspending or wasting your money.

To help make this process easier, here are 5 of the most important things you should consider when buying a van.

1. How will you use your van?

The first thing you need to do is determine the primary use of your van. If you use it for work, you’ll likely need a larger van with different features than one for social use.

The way you use your van will also affect the type of insurance you need. Read our full guide on van insurance to learn more about the different policy options available.

You should think ahead to understand what you’ll use your van for because this will impact:

  • The price of the van
  • Fuel economy
  • Passenger space
  • Vehicle weight and dimensions
  • Weight distribution
  • Running costs

Also, extra features like roof racking or load tippers may be unnecessary if you only intend to use the van for personal journeys.

2. Your budget and payment preference

Once you know what you want from your van, you need to set a budget. Vans vary drastically in price based on age, size, and other features, so having a budget will help you avoid overspending.

You need to factor in the running costs, too. Van insurance, fuel, tax, and maintenance can all be higher on larger vehicles, so assess whether you can afford to keep the van in good working condition once it’s yours.

How you pay for your van is another important consideration. Purchasing a vehicle outright will be the cheapest in the long term, but setting aside this amount of money isn’t always practical.

If you don’t have the funds to pay for the van you need upfront, you might consider taking out a van finance agreement, which will let you spread the cost of your van over a longer period of time.

3. What type of van do you need?

Choosing the correct type of van can be difficult, especially with so many different types and different van brands available.

The different types of vans are:

City vans (also known as car-derived vans)

City vans are small and agile vans with a base derived from cars, with the added practicality of decent storage space. Some common types of city vans are:

  • Vauxhall Combo
  • Renault Kangoo
  • Mercedes Citan

Short wheelbase vans (also known as an SWB or panel vans)

The most common type of van in the UK, short wheelbase vans (named as such due to the short distance between the front and rear wheels) offer substantial storage space while being practical to drive around towns and cities. Popular types of short wheelbase vans include:

  • Ford Transit
  • Vauxhall Vivaro
  • Renault Trafic

Long wheelbase vans (also known as LWB or box vans)

Favoured by large courier companies, long wheelbase vans (named as such due to the long distance between the front and rear wheels) have a large, box-shaped load area which is ideal for transporting lots of packages safely and securely. Some long wheelbase vans you might be familiar with are:

  • Mercedes Sprinter
  • Fiat Ducato
  • Ford Transit

Crew vans

As the name suggests, crew vans are ideal for transporting a load and additional passengers. They offer an extra row of seats, so they are suitable for small workforces and are commonly used by travelling groups and bands on tour. Types of crew vans include:

  • Volkswagen Transporter
  • Mercedes Vito
  • Ford Transit Connect

Luton vans

Removal companies commonly use Luton vans. The van has a boxed-shaped extension behind the main cab, usually with a tail lift to help get heavy goods into the storage space.

Most common van manufacturers offer Luton vans as options on their popular models, such as the Ford Transit. The following models of van are all Luton :

  • Peugeot Boxer Luton
  • Renault Master Luton
  • Vauxhall Movano Luton

Flatbed vans

Similar to a Luton van, a flatbed van has a traditional cab as the front of the vehicle, but instead of a box-shaped extension at the back, it has a large, exposed loading bed.

Flatbed vans are standard in the building industry as they can quickly be loaded. As with Luton vans, many standard van models can be built with a flatbed as an option. Some popular flatbed vans include the following:

  • Iveco Daily
  • Volkswagen Crafter
  • Mitsubishi Fuso

Transmission and fuel type

Think about whether you need a manual or automatic van and if you’d prefer to have an all-electric or hybrid vehicle. Some questions to ask yourself include:

  • Who will need to drive the van? If friends, family, or colleagues with automatic-only licenses need to drive your van, factor this in at the outset.
  • Will you be making long journeys or driving in stop-start traffic frequently? Drivers who make long journeys (e.g. haulers or couriers) sometimes prefer the ease of having an automatic van. Likewise, if you know you’ll need to drive in city-centre locations with frequent traffic jams, having an automatic vehicle can make this less frustrating.
  • Do you have a preference between petrol, diesel or electric? Environmentally-conscious drivers may choose a hybrid or electric van over a traditional petrol or diesel model. While this may be the more expensive option upfront, you could save money on fuel and road tax in the longer term. Moreover, if you work for a business with a clear stance on climate change, purchasing an electric van may be the right choice for you.

4. What size of van do you need?

Next, you’ll want to consider the size of the van you need. Make sure you check the dimensions of each van to work out what you need, so you can be sure it has enough capacity for whatever tools, equipment, or materials you want to carry.

You should also consider the type of wheelbase you will require – short, medium, or long. The wheelbase length determines your van’s storage capacity and can affect your van’s turning circle. Long-wheelbase vans will have more load space, but their manoeuvrability will be affected.

5. The weight of your van

As well as the dimensions of a van being an important consideration, you should also consider weight restrictions.

Light commercial vehicle (LCV) describes any commercial vehicle up to a gross weight of 3.5 tonnes.

Any vehicle with a gross weight of more than 3.5 tonnes is classed as a heavy goods vehicle (HGV). In accordance with the GOV.UK website, the following penalties will be issued if your van is overweight:

  • Less than 10% overweight: £100
  • More than 10%, but less than 15%: £200
  • More than 15%: £300

The £100 penalty will be given if the van is up to 9.99% overweight; however, DVSA examiners will give you 5% leeway before issuing a penalty, unless the weight has been exceeded by more than a tonne.

For serious cases of overloading, e.g. if a vehicle is overloaded by 30% or more, or the excess weight is 5 tonnes. In these instances, a court summons would be issued instead.

Things to consider when buying a new van

Buying a new van can be exciting, but there’s lots of things to think about when deciding if new or second-hand is right for you. In this section, we explore the benefits of buying a brand-new van compared to a second-hand one.

1. Reliability

New vans should be more reliable than second-hand ones because they haven’t had the same use. Van drivers typically put a lot of miles on their vehicles, and the excess weight of tools and materials can be an added strain.

A new van will not have suffered wear and tear from this type of use. In the short-term, a new van is less likely to have mechanical issues than a used one.

Furthermore, new vans will have a manufacturer’s warranty to replace key components should anything go wrong. This provides further peace of mind and can help to reduce repair costs.

2. Technology and safety features

To protect drivers and their cargo, van manufacturers constantly evolve and develop new features to make life easier and safer. Buying a new van ensures you can use new features, which could improve fuel efficiency and make driving more enjoyable.

Likewise, new petrol vans will have lower fuel emissions as they must meet higher standards than older models.

3. Resale value

While new vehicles do depreciate, new vans can retain their value if they’re well-maintained. Buying a new van can be expensive, so there is a big market for used van buyers.

4. Peace of mind

If you use your van daily and it is crucial for your job, you need to know you can rely on it. Buying a new van can provide this peace of mind, and you’ll know its complete service history.

Pros of buying a brand-new van

  • Reliability
  • Warranty coverage
  • Up-to-date features
  • Resale value
  • Minimal wear and tear.

Cons of buying a brand-new van

  • More expensive than buying used
  • Value depreciates quickly in the first few years of ownership
  • Higher insurance costs
  • Harder to negotiate the price of a new van than a used one
  • Limited variety compared to the used van market.

Things to consider when buying a used van

Buying a used van is a popular option, but there are still plenty of things to consider and look out for during the buying process.

1. The advert

Before you go and see the van, do your research on it. Make sure you read the vehicle’s listing or advert and look out for the following things:

  • The price: can you afford the van? Consider whether the van is reasonably priced when you factor in its age, mileage, and condition.
  • Mileage: what will you be using the van for? People drive an average of 8,000-12,000 miles per year – using these numbers, you can work out whether the van has a lot of mileage considering its age.
  • Fuel type: If you drive a lot of motorway miles, a diesel vehicle may be more appropriate, but if you only work locally a petrol van may be more suitable.
  • Extras: Does the van have everything you need? Things like parking sensors, air-con and cruise control, can all be useful on vans.

2. Payment protection

If you intend to buy a used van from a dealer or garage, you can check they have a solid reputation and if they are part of any trade associations. You could use their online reviews to see if they are trustworthy and if people would recommend them or not.

If you’re considering vans from private sellers, ensure you visit their homes to view the van; this way, you will have their address in case anything goes wrong.

3. Paperwork and service history

Be sure to check that all the paperwork is accurate and legitimate, as well as the van’s history – discrepancies with the V5C, for example, can indicate that the vehicle is or has previously been stolen.

You should also ask the seller how many owners the van has had, the type of work it has been used for and about its mileage history. These will help you understand the van’s condition.

Additionally, you can review the van’s full MOT and tax history and conduct a HPI check online. Doing this will help you to confirm what the seller has told you is accurate and uncover any hidden information about the vehicle. You can carry out these checks using the links below:

4. Condition

Whilst inspecting the van, check the vehicle identification number (VIN). These are typically found at the bottom of the windscreen. The VIN can track manufacturer recalls, warranty claims, and more.

Perform a visual inspection of the bodywork for any rust, damage or signs of oil leaks and check the condition and tread depth of the tyres. If you identify any problems with the van, you might be able to use these to negotiate a lower asking price with the seller.

You should also take a look inside the van, making sure that the interior, like the seats, rear-view mirror, floor, and ceiling are in good condition. If the interior is dirty, it could be a sign that the van has not been looked after.

After inspecting the van’s interior, you should make sure the electrics work. You can do this by starting the van – the first thing you’ll need to do upon switching the ignition on is listen to how it sounds. If something sounds odd or the van struggles to start, you should ask when the battery was last replaced.

After starting the vehicle, check the electrics work, including:

  • The lights: headlights, rear lights and fog lights, indicator lights, brake lights, hazard lights, and interior lights
  • Electric windows
  • Locking systems
  • Cigarette lights
  • Radio
  • Heating and air conditioning.

If possible, you should test drive the used van as this will provide a good sense of its condition. For tips on ensuring a successful test drive, including handy checklists of what to look out for when testing new and used cars, discover our how to test drive a car guide.

Pros of buying a used van

  • Lower cost than buying new
  • Potentially cheaper insurance
  • More negotiation power
  • Wider selection
  • Immediate availability – some brand-new vans need to be ordered and delivered.

Cons of buying a used van

  • Higher chance of mechanical failures
  • Lower fuel efficiency
  • You may not know the van’s full history
  • Limited or outdated features
  • Higher mileage.

For details of further checks you should conduct when buying a used vehicle, visit the GOV.UK website.

Van buying options

It’s important to consider the various buying options when buying a van. Here, we explain the options available when purchasing a van – buying outright, leasing a van, or buying with a personal loan or a finance agreement.

Buying a van outright

Buying a van outright will be cheaper in the long run if you have the money up-front to do so.

If you don’t have the funds available, you might consider a personal loan. While this will accumulate interest over time, you may be able to claim up to 100% VAT back on the monthly payments, provided the van is for business use only.

Explore the differences between business and personal use, whether van finance repayments are tax deductible, and more in our is van finance tax deductible? guide.

Leasing a van

Leasing a van is a popular option for many, though, like with leasing a car, you won’t ever fully own the vehicle. You’ll simply rent it over an agreed period for a fixed monthly fee, handing it back to the dealership or finance company when the lease comes to an end.

If you do decide to lease a van, there are certain things to consider before signing an agreement, including:

  • Mileage restrictions: most lease agreements set mileage limits, meaning you can’t drive more than the distance specified in your contract over a year. If you do exceed your mileage allowance, there will be an additional fee incurred.
  • Maintenance costs: some van leasing companies cover maintenance costs as part of your agreement. Don’t assume this to be the case, though; always check the terms and conditions before agreeing to any type of finance.
  • VAT deductions: if your business is VAT-registered and your van is only for business use, you may be able to claim back the cost of the rental payments as a tax-deductible expense.

Finance agreements

As with cars and motorbikes, several types of finance agreements are available to help you buy a new or used van. The best option for you will depend on your personal circumstances and whether you want to become the van’s legal owner at the end of your agreement.

With any finance agreement, the repayment terms and interest rates lenders offer may vary depending on your credit score. Learn more about how to check your credit score and the steps you can take to improve your credit rating on our blog.

Conditional Sale

A Conditional Sale (CS) agreement is the type of van finance we offer at Moneybarn.

CS finance is when you borrow money to purchase a van. You are typically expected to pay a deposit and then borrow a lump sum that you pay back monthly; however, this is subject to affordability and depends on your circumstances.

If approved, you will make monthly payments over an agreed period of time, and you’ll legally own the van once you make your final payment.

With CS, you won’t need to make a balloon payment or fee; the finance company will transfer ownership to you at the end of the agreement. During the agreement, you would be the registered keeper, meaning you have full access to the van and are responsible for maintaining it.

We specialise in bad credit van finance and have helped thousands of drivers across the UK get the vehicles they need. If you have poor credit or have had previous van finance applications refused, we could help. Try out our van finance calculator to see what your agreement would look like.

Representative 30.5% APR.

FAQs about buying a van

If you purchase a van for personal use, you will pay 20% VAT. VAT-registered businesses and sole traders may be able to claim back the VAT they are charged for buying a new van by sending a VAT return to HMRC.

When selling the van, the VAT-registered company or sole trader must charge VAT to the buyer.

Like all vehicles, vans depreciate quickly in their first few years after being bought; however, if they are well-maintained, they typically don’t lose as much value as, for example, a car.

When you come to sell your van, ensure it’s in good condition and that you can provide its full-service history to maximise the vehicle’s value.

If you’re buying a van for business use, whether you buy outright, lease, or finance the van, there are various implications on the vehicle excise duty/road tax.

When you buy a van outright, you may be able to claim the cost of it against your income tax bill, but how you go about this will depend on how you pay taxes.

If you purchase a van on finance, you can claim up to 100% VAT back on the monthly payments if your business is VAT-registered. As with buying a van outright, you may be able to also claim the van rental cost as an expense when filling out your tax return. These rental payments can be classed as a tax-deductible expense.

For more information on expenses and tax implications, visit the GOV.UK website.

For some of us, driving a van is essential to daily life. Whether it’s to transport goods, move tools and equipment between jobs, or simply pack up the family and head off on a weekend road trip, a reliable van is key to having a stress-free life on the road.

This guide explores the many factors you need to consider when buying a van. We’ll explore what you should think about, like the age, size, make, and type of van you need, as well as the different payment and van finance options available, so you can make an informed decision.

In this guide

What to consider when buying a van

To avoid ending up with a van that doesn’t quite meet your needs, you should ask yourself the following questions and explore your options thoroughly. This way, you can book test drives and commit to a vehicle, knowing you aren’t overspending or wasting your money.

To help make this process easier, here are 5 of the most important things you should consider when buying a van.

1. How will you use your van?

The first thing you need to do is determine the primary use of your van. If you use it for work, you’ll likely need a larger van with different features than one for social use.

The way you use your van will also affect the type of insurance you need. Read our full guide on van insurance to learn more about the different policy options available.

You should think ahead to understand what you’ll use your van for because this will impact:

  • The price of the van
  • Fuel economy
  • Passenger space
  • Vehicle weight and dimensions
  • Weight distribution
  • Running costs

Also, extra features like roof racking or load tippers may be unnecessary if you only intend to use the van for personal journeys.

2. Your budget and payment preference

Once you know what you want from your van, you need to set a budget. Vans vary drastically in price based on age, size, and other features, so having a budget will help you avoid overspending.

You need to factor in the running costs, too. Van insurance, fuel, tax, and maintenance can all be higher on larger vehicles, so assess whether you can afford to keep the van in good working condition once it’s yours.

How you pay for your van is another important consideration. Purchasing a vehicle outright will be the cheapest in the long term, but setting aside this amount of money isn’t always practical.

If you don’t have the funds to pay for the van you need upfront, you might consider taking out a van finance agreement, which will let you spread the cost of your van over a longer period of time.

3. What type of van do you need?

Choosing the correct type of van can be difficult, especially with so many different types and different van brands available.

The different types of vans are:

City vans (also known as car-derived vans)

City vans are small and agile vans with a base derived from cars, with the added practicality of decent storage space. Some common types of city vans are:

  • Vauxhall Combo
  • Renault Kangoo
  • Mercedes Citan

Short wheelbase vans (also known as an SWB or panel vans)

The most common type of van in the UK, short wheelbase vans (named as such due to the short distance between the front and rear wheels) offer substantial storage space while being practical to drive around towns and cities. Popular types of short wheelbase vans include:

  • Ford Transit
  • Vauxhall Vivaro
  • Renault Trafic

Long wheelbase vans (also known as LWB or box vans)

Favoured by large courier companies, long wheelbase vans (named as such due to the long distance between the front and rear wheels) have a large, box-shaped load area which is ideal for transporting lots of packages safely and securely. Some long wheelbase vans you might be familiar with are:

  • Mercedes Sprinter
  • Fiat Ducato
  • Ford Transit

Crew vans

As the name suggests, crew vans are ideal for transporting a load and additional passengers. They offer an extra row of seats, so they are suitable for small workforces and are commonly used by travelling groups and bands on tour. Types of crew vans include:

  • Volkswagen Transporter
  • Mercedes Vito
  • Ford Transit Connect

Luton vans

Removal companies commonly use Luton vans. The van has a boxed-shaped extension behind the main cab, usually with a tail lift to help get heavy goods into the storage space.

Most common van manufacturers offer Luton vans as options on their popular models, such as the Ford Transit. The following models of van are all Luton :

  • Peugeot Boxer Luton
  • Renault Master Luton
  • Vauxhall Movano Luton

Flatbed vans

Similar to a Luton van, a flatbed van has a traditional cab as the front of the vehicle, but instead of a box-shaped extension at the back, it has a large, exposed loading bed.

Flatbed vans are standard in the building industry as they can quickly be loaded. As with Luton vans, many standard van models can be built with a flatbed as an option. Some popular flatbed vans include the following:

  • Iveco Daily
  • Volkswagen Crafter
  • Mitsubishi Fuso

Transmission and fuel type

Think about whether you need a manual or automatic van and if you’d prefer to have an all-electric or hybrid vehicle. Some questions to ask yourself include:

  • Who will need to drive the van? If friends, family, or colleagues with automatic-only licenses need to drive your van, factor this in at the outset.
  • Will you be making long journeys or driving in stop-start traffic frequently? Drivers who make long journeys (e.g. haulers or couriers) sometimes prefer the ease of having an automatic van. Likewise, if you know you’ll need to drive in city-centre locations with frequent traffic jams, having an automatic vehicle can make this less frustrating.
  • Do you have a preference between petrol, diesel or electric? Environmentally-conscious drivers may choose a hybrid or electric van over a traditional petrol or diesel model. While this may be the more expensive option upfront, you could save money on fuel and road tax in the longer term. Moreover, if you work for a business with a clear stance on climate change, purchasing an electric van may be the right choice for you.

4. What size of van do you need?

Next, you’ll want to consider the size of the van you need. Make sure you check the dimensions of each van to work out what you need, so you can be sure it has enough capacity for whatever tools, equipment, or materials you want to carry.

You should also consider the type of wheelbase you will require – short, medium, or long. The wheelbase length determines your van’s storage capacity and can affect your van’s turning circle. Long-wheelbase vans will have more load space, but their manoeuvrability will be affected.

5. The weight of your van

As well as the dimensions of a van being an important consideration, you should also consider weight restrictions.

Light commercial vehicle (LCV) describes any commercial vehicle up to a gross weight of 3.5 tonnes.

Any vehicle with a gross weight of more than 3.5 tonnes is classed as a heavy goods vehicle (HGV). In accordance with the GOV.UK website, the following penalties will be issued if your van is overweight:

  • Less than 10% overweight: £100
  • More than 10%, but less than 15%: £200
  • More than 15%: £300

The £100 penalty will be given if the van is up to 9.99% overweight; however, DVSA examiners will give you 5% leeway before issuing a penalty, unless the weight has been exceeded by more than a tonne.

For serious cases of overloading, e.g. if a vehicle is overloaded by 30% or more, or the excess weight is 5 tonnes. In these instances, a court summons would be issued instead.

Things to consider when buying a new van

Buying a new van can be exciting, but there’s lots of things to think about when deciding if new or second-hand is right for you. In this section, we explore the benefits of buying a brand-new van compared to a second-hand one.

1. Reliability

New vans should be more reliable than second-hand ones because they haven’t had the same use. Van drivers typically put a lot of miles on their vehicles, and the excess weight of tools and materials can be an added strain.

A new van will not have suffered wear and tear from this type of use. In the short-term, a new van is less likely to have mechanical issues than a used one.

Furthermore, new vans will have a manufacturer’s warranty to replace key components should anything go wrong. This provides further peace of mind and can help to reduce repair costs.

2. Technology and safety features

To protect drivers and their cargo, van manufacturers constantly evolve and develop new features to make life easier and safer. Buying a new van ensures you can use new features, which could improve fuel efficiency and make driving more enjoyable.

Likewise, new petrol vans will have lower fuel emissions as they must meet higher standards than older models.

3. Resale value

While new vehicles do depreciate, new vans can retain their value if they’re well-maintained. Buying a new van can be expensive, so there is a big market for used van buyers.

4. Peace of mind

If you use your van daily and it is crucial for your job, you need to know you can rely on it. Buying a new van can provide this peace of mind, and you’ll know its complete service history.

Pros of buying a brand-new van

  • Reliability
  • Warranty coverage
  • Up-to-date features
  • Resale value
  • Minimal wear and tear.

Cons of buying a brand-new van

  • More expensive than buying used
  • Value depreciates quickly in the first few years of ownership
  • Higher insurance costs
  • Harder to negotiate the price of a new van than a used one
  • Limited variety compared to the used van market.

Things to consider when buying a used van

Buying a used van is a popular option, but there are still plenty of things to consider and look out for during the buying process.

1. The advert

Before you go and see the van, do your research on it. Make sure you read the vehicle’s listing or advert and look out for the following things:

  • The price: can you afford the van? Consider whether the van is reasonably priced when you factor in its age, mileage, and condition.
  • Mileage: what will you be using the van for? People drive an average of 8,000-12,000 miles per year – using these numbers, you can work out whether the van has a lot of mileage considering its age.
  • Fuel type: If you drive a lot of motorway miles, a diesel vehicle may be more appropriate, but if you only work locally a petrol van may be more suitable.
  • Extras: Does the van have everything you need? Things like parking sensors, air-con and cruise control, can all be useful on vans.

2. Payment protection

If you intend to buy a used van from a dealer or garage, you can check they have a solid reputation and if they are part of any trade associations. You could use their online reviews to see if they are trustworthy and if people would recommend them or not.

If you’re considering vans from private sellers, ensure you visit their homes to view the van; this way, you will have their address in case anything goes wrong.

3. Paperwork and service history

Be sure to check that all the paperwork is accurate and legitimate, as well as the van’s history – discrepancies with the V5C, for example, can indicate that the vehicle is or has previously been stolen.

You should also ask the seller how many owners the van has had, the type of work it has been used for and about its mileage history. These will help you understand the van’s condition.

Additionally, you can review the van’s full MOT and tax history and conduct a HPI check online. Doing this will help you to confirm what the seller has told you is accurate and uncover any hidden information about the vehicle. You can carry out these checks using the links below:

4. Condition

Whilst inspecting the van, check the vehicle identification number (VIN). These are typically found at the bottom of the windscreen. The VIN can track manufacturer recalls, warranty claims, and more.

Perform a visual inspection of the bodywork for any rust, damage or signs of oil leaks and check the condition and tread depth of the tyres. If you identify any problems with the van, you might be able to use these to negotiate a lower asking price with the seller.

You should also take a look inside the van, making sure that the interior, like the seats, rear-view mirror, floor, and ceiling are in good condition. If the interior is dirty, it could be a sign that the van has not been looked after.

After inspecting the van’s interior, you should make sure the electrics work. You can do this by starting the van – the first thing you’ll need to do upon switching the ignition on is listen to how it sounds. If something sounds odd or the van struggles to start, you should ask when the battery was last replaced.

After starting the vehicle, check the electrics work, including:

  • The lights: headlights, rear lights and fog lights, indicator lights, brake lights, hazard lights, and interior lights
  • Electric windows
  • Locking systems
  • Cigarette lights
  • Radio
  • Heating and air conditioning.

If possible, you should test drive the used van as this will provide a good sense of its condition. For tips on ensuring a successful test drive, including handy checklists of what to look out for when testing new and used cars, discover our how to test drive a car guide.

Pros of buying a used van

  • Lower cost than buying new
  • Potentially cheaper insurance
  • More negotiation power
  • Wider selection
  • Immediate availability – some brand-new vans need to be ordered and delivered.

Cons of buying a used van

  • Higher chance of mechanical failures
  • Lower fuel efficiency
  • You may not know the van’s full history
  • Limited or outdated features
  • Higher mileage.

For details of further checks you should conduct when buying a used vehicle, visit the GOV.UK website.

Van buying options

It’s important to consider the various buying options when buying a van. Here, we explain the options available when purchasing a van – buying outright, leasing a van, or buying with a personal loan or a finance agreement.

Buying a van outright

Buying a van outright will be cheaper in the long run if you have the money up-front to do so.

If you don’t have the funds available, you might consider a personal loan. While this will accumulate interest over time, you may be able to claim up to 100% VAT back on the monthly payments, provided the van is for business use only.

Explore the differences between business and personal use, whether van finance repayments are tax deductible, and more in our is van finance tax deductible? guide.

Leasing a van

Leasing a van is a popular option for many, though, like with leasing a car, you won’t ever fully own the vehicle. You’ll simply rent it over an agreed period for a fixed monthly fee, handing it back to the dealership or finance company when the lease comes to an end.

If you do decide to lease a van, there are certain things to consider before signing an agreement, including:

  • Mileage restrictions: most lease agreements set mileage limits, meaning you can’t drive more than the distance specified in your contract over a year. If you do exceed your mileage allowance, there will be an additional fee incurred.
  • Maintenance costs: some van leasing companies cover maintenance costs as part of your agreement. Don’t assume this to be the case, though; always check the terms and conditions before agreeing to any type of finance.
  • VAT deductions: if your business is VAT-registered and your van is only for business use, you may be able to claim back the cost of the rental payments as a tax-deductible expense.

Finance agreements

As with cars and motorbikes, several types of finance agreements are available to help you buy a new or used van. The best option for you will depend on your personal circumstances and whether you want to become the van’s legal owner at the end of your agreement.

With any finance agreement, the repayment terms and interest rates lenders offer may vary depending on your credit score. Learn more about how to check your credit score and the steps you can take to improve your credit rating on our blog.

Conditional Sale

A Conditional Sale (CS) agreement is the type of van finance we offer at Moneybarn.

CS finance is when you borrow money to purchase a van. You are typically expected to pay a deposit and then borrow a lump sum that you pay back monthly; however, this is subject to affordability and depends on your circumstances.

If approved, you will make monthly payments over an agreed period of time, and you’ll legally own the van once you make your final payment.

With CS, you won’t need to make a balloon payment or fee; the finance company will transfer ownership to you at the end of the agreement. During the agreement, you would be the registered keeper, meaning you have full access to the van and are responsible for maintaining it.

We specialise in bad credit van finance and have helped thousands of drivers across the UK get the vehicles they need. If you have poor credit or have had previous van finance applications refused, we could help. Try out our van finance calculator to see what your agreement would look like.

Representative 30.5% APR.

FAQs about buying a van

If you purchase a van for personal use, you will pay 20% VAT. VAT-registered businesses and sole traders may be able to claim back the VAT they are charged for buying a new van by sending a VAT return to HMRC.

When selling the van, the VAT-registered company or sole trader must charge VAT to the buyer.

Like all vehicles, vans depreciate quickly in their first few years after being bought; however, if they are well-maintained, they typically don’t lose as much value as, for example, a car.

When you come to sell your van, ensure it’s in good condition and that you can provide its full-service history to maximise the vehicle’s value.

If you’re buying a van for business use, whether you buy outright, lease, or finance the van, there are various implications on the vehicle excise duty/road tax.

When you buy a van outright, you may be able to claim the cost of it against your income tax bill, but how you go about this will depend on how you pay taxes.

If you purchase a van on finance, you may be able to claim up to 100% VAT back on the monthly payments if your business is VAT-registered. As with buying a van outright, you can also claim the van rental cost as an expense when filling out your tax return. These rental payments can be classed as a tax-deductible expense.

For more information on expenses and tax implications, visit the GOV.UK website.

 
Paul Green, National Remarketing Manager
Bringing you tips on buying and maintaining your vehicle to make life on the road less stressful.
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