How Does Van Leasing Work?
What is van leasing?
Van leasing is a long-term rental agreement offering the exclusive use of a van or pick-up truck for a set period of time. At the start of a contract, the customer pays an initial rental, followed by a series of monthly payments for a period of 2, 3 or 4 years. At the end of the contract, the van is handed back to the finance provider without any further obligations, leaving the customer free to lease or purchase another vehicle.
Over the past few years, van leasing has grown increasingly popular with sole traders, partnerships and limited companies as it offers an alternative, often cheaper funding solution to buying a new van with a bank loan or dealer finance. With a van lease agreement, the customer also doesn’t have to worry about depreciation or selling the van as this responsibility lies with the finance provider.
Key benefits of van leasing
- Low initial rental helps to avoid huge up-front costs
- Fixed monthly rentals for the term of the lease make budget planning easier
- Flexible duration and mileage terms to meet your needs
- Maintenance, servicing and tyre package can be included in monthly fee
- Road tax is included for duration of the agreement
- No depreciation risks or disposal concerns
- Full manufacturer warranty offered as standard on all vehicles
- Enjoy a new van every 2, 3 or 4 years
Key considerations of van leasing
- The cost to terminate the contract early can be expensive
- The monthly cost is based on mileage
- Excess mileage charges will apply if you exceed the agreed mileage allowance
- You must return the van in good condition as charges will apply for any damage over and above Fair Wear and Tear
- Vehicles must be insured with full comprehensive cover
- You will never own the vehicle as there is no option to buy it
What is business van leasing?
If you are a limited company, partnership, sole trader or LLP, you may be eligible to apply for a business van leasing agreement. A business van leasing agreement offers many positive tax implications and business customers can also take advantage of exclusive extras such as outsourced fleet administration. All business lease prices exclude VAT.
Different business van leasing contracts available
Business Contract Hire Explained
Business Contract Hire (BCH) is our most popular van leasing contract type and is suitable for sole traders, partnerships and limited companies. With BCH, you pay for the use of the vehicle throughout your contract, then return the car to the finance company at the end of the agreement without any further obligations. Monthly rentals depend on the value of the vehicle, the length of the contract and the agreed mileage. On a BCH agreement, it is also possible to include maintenance, servicing and tyre packages into the monthly rentals.
Business Contract Purchase
Business Contract Purchase (BCP) is a finance agreement for VAT registered companies and businesses that want to own their vehicles but want to avoid the risk of depreciating assets. With a BCP agreement, you purchase a vehicle via a series of monthly instalments and ownership passes to you at the end of the contract following a final payment. Monthly rentals depend on the value of the vehicle, the length of the contract, the agreed mileage and the guaranteed residual value.
NB: Business Contract Purchase (BCP) agreements are not available with Nationwide Vehicle Contracts.
Business Lease Purchase
Business Lease Purchase is a popular finance option with businesses who want to buy the vehicle but do not want to spend the money up front. With a Business Lease Purchase agreement, the vehicle is leased for a fixed monthly payment with the option to purchase it at the end of the agreement. As Business Lease Purchase is purely a finance package, it does not include maintenance or other added-value services such as those offered with Business Contract Hire (BCH).
NB: Nationwide Vehicle Contracts does not offer Business Lease Purchase agreements.
What is personal van leasing?
Personal van leasing is when a private individual (instead of a business or a company) takes out a lease agreement on a new van or pick-up truck. It offers an alternative funding solution for sole traders, partnerships and limited companies who have been trading for less than a year or who have previously been denied vehicle finance. With a personal lease agreement, the private individual taking out the lease agreement is approved for finance, rather than the company or business.
NB: Personal van leasing is not available on every product as this funding solution is only available through selected finance providers.
Different personal van leasing contracts available
Personal Contract Hire
Personal Contract Hire (PCH) is a popular long-term lease agreement for private individuals. With PCH, you pay for the use of the vehicle throughout your contract, then return the car to the finance company at the end of the agreement without any further obligations. PCH is similar to Business Contract Hire (BCH) but as an individual you will not be able to recover any VAT or take advantage of any tax allowances.
Personal Contract Purchase
Personal Contract Purchase (PCP) is a vehicle finance agreement which gives you the option of purchasing the vehicle at the end of the agreement. With PCP, you pay an initial rental, followed by a series of monthly rentals for the duration of your agreement. At the end of the contract, you can either buy the car outright for an agreed lump sum or hand the vehicle back to the finance provider without any further obligations. Monthly rentals depend on the value of the vehicle, the length of the contract, the agreed mileage and the guaranteed residual value.
NB: Personal Contract Purchase (PCP) agreements are not available with Nationwide Vehicle Contracts.
Personal Lease Purchase
Personal Lease Purchase is a popular finance option for customers who want to own the van but cannot access sufficient funds to pay for the new van outright upfront. With Personal Lease Purchase, you pay an initial deposit followed by a series of monthly payments, then a ‘balloon payment’ at the end of the contract to own the vehicle. As Personal Lease Purchase is purely a finance package, it does not include maintenance or other added-value services such as those offered with Personal Contract Hire (PCH).
NB: Nationwide Vehicle Contracts does not offer Personal Lease Purchase agreements.
“Van leasing is an excellent option for businesses that need a new vehicle and want to keep their costs low. It is increasingly popular with limited companies and sole traders because of the fixed monthly rentals and positive tax implications.”
Why choose Nationwide Vehicle Contracts for van leasing?
Nationwide Vehicle Contracts is one of the UK leading providers of car and van leasing. Since 2002, we have been providing van and pick-up leasing to businesses and private individuals and have helped to arrange more than 55,000 lease contracts in the past 14 years.
Whether you're looking for a practical and versatile panel van or a robust and reliable pick-up truck, we’re sure to have a van lease deal to suit you. Our specialist team has over 10 years, experience in the leasing industry as well as a host of awards under our belt including Network Vehicles 'Platinum Broker of the Year' three times!