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Car finance ›
Should you lease or buy your next van?
Updated: Thursday, 14 March 2024
When it comes to buying a van, you have lots of different options to choose from, like buying outright, leasing, or getting van finance. Before you make a decision, it’s important you think about the differences between these payment methods.
In this guide, we explore how leasing a van is different from buying or financing to help you make the right decision for your next van.
What happens when you buy a van?
Whether you’re in the market for a used or brand-new van, there are many factors to consider. For more information, see our comprehensive guide to buying a van.
When it comes to buying a van, you have lots of different options to choose from, like buying outright, leasing, or getting van finance. Before you make a decision, it’s important you think about the differences between these payment methods.
In this guide, we explore how leasing a van is different from buying or financing to help you make the right decision for your next van.
What happens when you buy a van?
Whether you’re in the market for a used or brand-new van, there are many factors to consider. For more information, see our comprehensive guide to buying a van.
Before you view the van
Once you’ve found a suitable van within your budget, you can check its history using the DVLA website. To do this, you’ll need to know the van’s registration plate.
This will tell you if the van is taxed and has passed its most recent MOT. You can also check the MOT history of the vehicle to see how the van has been looked after and if it has any underlying issues.
Before you view the van
Once you’ve found a suitable van within your budget, you can check its history using the DVLA website. To do this, you’ll need to know the van’s registration plate.
This will tell you if the van is taxed and has passed its most recent MOT. You can also check the MOT history of the vehicle to see how the van has been looked after and if it has any underlying issues.
Inspecting and test-driving the van
When you’ve found a van that looks right for you, the next step is to go and see it in person. Ideally, this would be during the day when it’s dry, so it’s easier to spot damage or signs of wear and tear.
Make sure you take the van for a test drive – try to get at least 15 minutes of driving on various road types, including minor and major roads, to see how the van performs in different conditions and ensure everything is working as it should.
Inspecting and test-driving the van
When you’ve found a van that looks right for you, the next step is to go and see it in person. Ideally, this would be during the day when it’s dry, so it’s easier to spot damage or signs of wear and tear.
Make sure you take the van for a test drive – try to get at least 15 minutes of driving on various road types, including minor and major roads, to see how the van performs in different conditions and ensure everything is working as it should.
Buying the van
If you’re satisfied the van is right for you, the next step is to agree a deal. You could use the information from the MOT history and any defects you’ve noticed while inspecting the van to negotiate its price.
After agreeing a deal, you’ll need the original copies of the following documents:
- The logbook (V5C logbook): you need this to transfer ownership and organise road tax as soon as the purchase is completed.
- The most recent MOT test document: this proves that the van has passed its MOT and is roadworthy.
The seller will also help you complete the green ‘new keeper slip’, so the DVLA can confirm the van is registered to you. You can find more information about this on GOV.UK.
Buying the van
If you’re satisfied the van is right for you, the next step is to agree a deal. You could use the information from the MOT history and any defects you’ve noticed while inspecting the van to negotiate its price.
After agreeing a deal, you’ll need the original copies of the following documents:
- The logbook (V5C logbook): you need this to transfer ownership and organise road tax as soon as the purchase is completed.
- The most recent MOT test document: this proves that the van has passed its MOT and is roadworthy.
The seller will also help you complete the green ‘new keeper slip’, so the DVLA can confirm the van is registered to you. You can find more information about this on GOV.UK.
Paying for the van
There are several ways to buy a van:
- Cash: you won’t have as much protection as other payment methods, but it means that you’ll own the van outright.
- Debit card or bank transfer: these methods can be more convenient than paying cash, and paying via debit card might provide some payment protection.
- Finance or leasing: finance lets you spread the cost of a van over an agreed time period (usually several years) so you don’t pay it all up-front. Leasing is like a short-term rental, where you make monthly payments for a set period of time, but you never own the van. Instead, you’ll hand it back to the company at the end of the lease period.
- Personal loan: this is typically an unsecured loan, where you borrow a sum of money which you can use to buy a van.
- Credit card: most dealerships don’t accept credit cards, but if you choose to pay this way then you will benefit from payment protection (also known as Section 75).
Paying for the van
There are several ways to buy a van:
- Cash: you won’t have as much protection as other payment methods, but it means that you’ll own the van outright.
- Debit card or bank transfer: these methods can be more convenient than paying cash, and paying via debit card might provide some payment protection.
- Finance or leasing: finance lets you spread the cost of a van over an agreed time period (usually several years) so you don’t pay it all up-front. Leasing is like a short-term rental, where you make monthly payments for a set period of time, but you never own the van. Instead, you’ll hand it back to the company at the end of the lease period.
- Personal loan: this is typically an unsecured loan, where you borrow a sum of money which you can use to buy a van.
- Credit card: most dealerships don’t accept credit cards, but if you choose to pay this way then you will benefit from payment protection (also known as Section 75).
What is van leasing and how does it work?
If you lease a van, you are essentially renting it over a set period of time, usually between 24 and 48 months. During this time, you’ll make monthly payments and have full use of the van.
However, you won’t ever be able to own the van – you’ll have to hand it back at the end of the lease agreement.
Is it better to lease or buy a van?
Leasing might allow you to drive a newer van than if you bought it outright or with finance. This might be better if you want newer technology or want to get a hybrid or electric van, however, you’ll never be able to own it. When buying a van on finance, most financing options allow you to own the van at the end of the agreement.
Below, we explore some examples to help you decide what’s best for you.
When might it be best to lease a van?
- If you want to change your van regularly or prefer driving a newer van
- If you want to make monthly payments instead of one lump sum
- If you want to avoid paying other costs, like road tax and MOTs
- If you use the van for work, you may be able to claim the leasing fee as a business expense
When might it be best to buy a van?
- If you want to own the van outright and have full, unrestricted use of it
- If you don’t want to swap the van
- If you need the flexibility of driving without a mileage limit
- If you want to modify, sell, or trade in the van when you wish
Leasing vs buying a van: pros and cons
What is van leasing and how does it work?
If you lease a van, you are essentially renting it over a set period of time, usually between 24 and 48 months. During this time, you’ll make monthly payments and have full use of the van.
However, you won’t ever be able to own the van – you’ll have to hand it back at the end of the lease agreement.
Is it better to lease or buy a van?
Leasing might allow you to drive a newer van than if you bought it outright or with finance. This might be better if you want newer technology or want to get a hybrid or electric van, however, you’ll never be able to own it. When buying a van on finance, most financing options allow you to own the van at the end of the agreement.
Below, we explore some examples to help you decide what’s best for you.
When might it be best to lease a van?
- If you want to change your van regularly or prefer driving a newer van
- If you want to make monthly payments instead of one lump sum
- If you want to avoid paying other costs, like road tax and MOTs
- If you use the van for work, you may be able to claim the leasing fee as a business expense
When might it be best to buy a van?
- If you want to own the van outright and have full, unrestricted use of it
- If you don’t want to swap the van
- If you need the flexibility of driving without a mileage limit
- If you want to modify, sell, or trade in the van when you wish
Leasing vs buying a van: pros and cons
Pros of leasing a van
- Leasing deals usually include servicing and maintenance costs
- You may be able to deduct the monthly cost of leasing the van as a business expense
- You will pay a fixed monthly cost
- You can upgrade or get a new van at the end of your lease agreement
Cons of leasing a van
- You may have mileage restrictions, depending on your lease agreement
- You’ll never own the van and won’t have the option to buy it at the end of the lease
- You may have to pay an additional charge to end your leasing agreement early
- You may be charged for repairs if there is damage outside of fair wear and tear
Pros of leasing a van
- Leasing deals usually include servicing and maintenance costs
- You may be able to deduct the monthly cost of leasing the van as a business expense
- You will pay a fixed monthly cost
- You can upgrade or get a new van at the end of your lease agreement
Cons of leasing a van
- You may have mileage restrictions, depending on your lease agreement
- You’ll never own the van and won’t have the option to buy it at the end of the lease
- You may have to pay an additional charge to end your leasing agreement early
- You may be charged for repairs if there is damage outside of fair wear and tear
Pros of buying a van
- You’ll own the van outright and be able to sell or part exchange it as you wish
- There are no additional fees or interest payments if you pay upfront
- You have more choice of where and who you buy the van from
- You will be able to modify the van and use it as you wish
Cons of buying a van
- You will be responsible for maintaining, servicing, and arranging MOTs for the van
- You will likely sell the van for less than it was bought for due to depreciation
- You will have less protection buying privately than from a dealership or on finance
- Finance is secured against the van, so it could be repossessed if you can’t pay
Pros of buying a van
- You’ll own the van outright and be able to sell or part exchange it as you wish
- There are no additional fees or interest payments if you pay upfront
- You have more choice of where and who you buy the van from
- You will be able to modify the van and use it as you wish
Cons of buying a van
- You will be responsible for maintaining, servicing, and arranging MOTs for the van
- You will likely sell the van for less than it was bought for due to depreciation
- You will have less protection buying privately than from a dealership or on finance
- Finance is secured against the van, so it could be repossessed if you can’t pay
What's the main difference between leasing and financing a van?
The main difference between leasing and financing a van is that you do not have the option to own the van when you take out a leasing agreement.
When you finance a van, you will have the option to own the vehicle once the agreement has ended. Whether or not there will be an additional payment or fee will depend on the type of finance you get.
Some finance deals also require a deposit, which can either be from a part exchange or cash. Some lenders also offer no deposit van finance, depending on your circumstances.
What is van financing?
Van finance is when a finance company pays the dealership for you, and you make monthly payments to them over an agreed period. This lets you spread the cost over a longer period of time, helping you to buy a van without having to pay it all upfront.
You’ll make monthly payments until the amount you’ve borrowed is repaid, with interest.
The most popular types of van finance are:
What's the main difference between leasing and financing a van?
The main difference between leasing and financing a van is that you do not have the option to own the van when you take out a leasing agreement.
When you finance a van, you will have the option to own the vehicle once the agreement has ended. Whether or not there will be an additional payment or fee will depend on the type of finance you get.
Some finance deals also require a deposit, which can either be from a part exchange or cash. Some lenders also offer no deposit van finance, depending on your circumstances.
What is van financing?
Van finance is when a finance company pays the dealership for you, and you make monthly payments to them over an agreed period. This lets you spread the cost over a longer period of time, helping you to buy a van without having to pay it all upfront.
You’ll make monthly payments until the amount you’ve borrowed is repaid, with interest.
The most popular types of van finance are:
Conditional Sale (CS)
Conditional Sale agreements are similar to Hire Purchase in that you make fixed monthly payments over an agreed term.
At the end of the agreement, you will own the van outright without any extra costs.
Hire Purchase (HP)
Hire Purchase plans are where you put down a deposit at the start of the agreement and make fixed monthly payments over an agreed term.
Once you’ve made the final monthly payment, you can become the van’s owner by paying an ‘option to purchase fee’, which is agreed at the start of the finance plan.
Personal Contract Purchase (PCP)
As part of a Personal Contract Plan (PCP), you put down a deposit (usually 10% of the van’s value) and make monthly payments for a set amount of time.
Once the agreement is over, you’ll have three options:
- Pay the ‘balloon payment’ and keep the van
- Trade-in the van for a new one on PCP
- Return the van to the finance company or dealership
Conditional Sale (CS)
Conditional Sale agreements are similar to Hire Purchase in that you make fixed monthly payments over an agreed term.
At the end of the agreement, you will own the van outright without any extra costs.
Hire Purchase (HP)
Hire Purchase plans are where you put down a deposit at the start of the agreement and make fixed monthly payments over an agreed term.
Once you’ve made the final monthly payment, you can become the van’s owner by paying an ‘option to purchase fee’, which is agreed at the start of the finance plan.
Personal Contract Purchase (PCP)
As part of a Personal Contract Plan (PCP), you put down a deposit (usually 10% of the van’s value) and make monthly payments for a set amount of time.
Once the agreement is over, you’ll have three options:
- Pay the ‘balloon payment’ and keep the van
- Trade-in the van for a new one on PCP
- Return the van to the finance company or dealership
Finance your next van with Moneybarn
If you’re looking to get a new van for your job or business, we’d love to help. We have over 30 years of experience helping people up and down the UK, even if they need van finance with bad credit.
Our Conditional Sale agreement means you’ll put down a deposit and make monthly payments for an agreed time between 36 and 60 months. Once you’ve made your final payment, you’ll become the legal owner of the van.
See what your agreement could look like by using our van finance calculator. When you’re ready, get an instant quote – it takes less than 5 minutes, and we only use a soft search at the point of application.
Representative 30.5% APR.
Finance your next van with Moneybarn
If you’re looking to get a new van for your job or business, we’d love to help. We have over 30 years of experience helping people up and down the UK, even if they need van finance with bad credit.
Our Conditional Sale agreement means you’ll put down a deposit and make monthly payments for an agreed time between 36 and 60 months. Once you’ve made your final payment, you’ll become the legal owner of the van.
See what your agreement could look like by using our van finance calculator. When you’re ready, get an instant quote – it takes less than 5 minutes, and we only use a soft search at the point of application.
Representative 30.5% APR.
For a better road ahead
Moneybarn is a member of the Finance and Leasing Association, the official trade organisation of the motor finance industry. The FLA promotes best practice in the motor finance industry for lending and leasing to consumers and businesses.
Moneybarn is the trading style of Moneybarn No. 1 Limited, a company registered in England and Wales with company number 04496573, and Moneybarn Limited, a company registered in England and Wales with company number 02766324. The registered address for these companies is: Athena House, Bedford Road, Petersfield, Hampshire, GU32 3LJ.
Moneybarn’s VAT registration number is 180 5559 52.
Moneybarn Limited is authorised and regulated by the Financial Conduct Authority (Financial Services reference No. 702781)
Moneybarn No. 1 Limited is authorised and regulated by the Financial Conduct Authority (Financial Services reference No. 702780)
