Business van hire, lease or buy – what’s the difference?

Comparing whether it’s more cost-effective to rent, buy or lease your vans can be time-consuming. Many businesses will opt for what works or sounds the cheapest but often end up overpaying.

Our quick-reference tables provide a side by side view of the different options making it easy to see what you get, and where savings can be made.

It simply comes down to deciding what your business needs and what it could benefit from.

 

There are three key areas to consider

Once the lifetime costs of a vehicle and depreciation have been considered, the options usually come very close to each other in price. Where they differ greatly is how much you need to manage yourself and what you get in terms of:

 

1. Cost Management
2. Flexibility
3. Support

 

From purchasing vehicles where everything is left down to you, to an all-inclusive vehicle hire package, there are big differences between renting, buying, and leasing.

 

Cost Management

To avoid overpaying for your vans, it is crucial to have a monthly breakdown of every cost that goes into meeting your business’s vehicle needs.

The cheapest options are usually barebones – often leaving the expensive monthly ongoing costs to you. The monthly ongoing costs are what we refer to as ‘hidden costs’ because they are often overlooked.

If a business is overpaying for their vans, it is most likely because they have swept a few too many “one-off” costs (or those that can “wait until later”) under the rug.  

When it comes to cost-management, getting a van is only half the battle. Cashflow, tax relief, no end of contract charges, no setup fees, depreciation, vehicle refreshes – these perks all have value and they are often stripped out of the cheaper deals.   

Flexibility

In a perfect world, fleets would be able to commit to a van from the day it was made to the end of its natural life.

Rarely is a business that predictable though. Almost all businesses benefit from some degree of flexibility, so it is worth factoring in the potential costs of getting stuck with too many vehicles or the wrong type of vehicle.

There’s also cashflow and credit to consider. Purchase and lease options often require sizeable deposits or advance payments and can tie you into long term contracts, which may include early termination fees.

By contrast, Northgate’s vehicle hire packages enable you to spread out your costs for the time periods that suit you. Our flexible hire options are great for growing businesses, meeting seasonal demand, and fulfilling project-based or contractual work.

 

> Learn more about what’s included with Northgate Vehicle Hire

 

And especially now, with COVID-19 and Brexit creating economic uncertainty, we’re seeing an increase in businesses who value having the flexibility to change their vehicle needs based on fast-moving policy changes – and the prospect of future lockdowns.

 

Support

From just the provision of a van to ongoing support and fleet management, different payment options offer varying levels of cover and convenience.

Whereas purchasing a vehicle might leave the maintenance of a vehicle down to you and third-party suppliers, a vehicle hire package like Northgate’s offers fully managed vehicles and access to our own workshops – effectively, allowing you to meet all your vehicle needs in one and with simple regular payments.

Whether it’s more cost-effective to rent, buy or lease might come down to how much time or resources you want to commit to managing your fleet. Meeting your day to day vehicle needs can quickly become a job in and of itself – and if you are already in a dedicated fleet management role, our fleet consultants can assist you in building a package that meets your strategic goals.

 

Looking for a quote for hiring a van with Northgate?

Our fleet consultants can help you build a cost-effective vehicle hire package for your business.

Northgate goes beyond the traditional methods of getting vans, by offering you a complete service designed to keep your business on the road and ahead of the competition. We call this Vans as a Service (VaaS).

Find out about all the benefits of hiring a van with Northgate…

  

Get a personalised business vehicle hire quote for your business.

 

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