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Pros and cons of van leasing
31 Mar 2025
What is Van Leasing?
Van leasing, also known as contract hire (BCH or PCH), is a popular option for businesses and individuals who need a vehicle without the commitment of ownership. This arrangement allows you to use a brand-new van for a fixed period, typically between 2 to 5 years, while making regular monthly payments. At the end of the lease term, you simply return the van to the leasing company.
Van leasing can be a great solution for businesses and individuals who want the benefits of a new vehicle without the long-term commitment of ownership. However, it's essential to weigh the pros and cons to determine if it's the right choice for your specific needs.
What is Business Contract Hire (BCH)?
BCH is a specific type of van leasing tailored for businesses. It offers several advantages, particularly for companies that need to manage their fleet efficiently and cost-effectively.
Pros of Van Leasing
- Fixed monthly cost - leasing a van means you pay a fixed monthly fee, making it easier to budget and manage your business finances.
- A brand-new van - leasing allows you to drive a new van equipped with the latest technology and features, enhancing your driving experience and potentially improving your business operations.
- No worries about depreciation - since you don't own the van, you don't have to worry about its depreciation over time.
- Less worry about maintenance and admin - many leasing agreements include maintenance packages, reducing the hassle of dealing with repairs and administrative tasks.
Cons of Van Leasing
- No ownership - at the end of the lease term, you must return the van. You won't own the vehicle, which means you can't sell it or keep it for longer without entering into a new lease agreement.
- Credit history - leasing companies typically require a good credit history. If your credit score is low, you might face difficulties getting approved for a lease.
- Mileage limitations - leases come with mileage limits. If you exceed the agreed mileage, you'll be charged extra fees. It's important to accurately forecast your business mileage to avoid these charges.
- Costly repairs - if you return the van with any damage beyond normal wear and tear, you'll be liable for substantial repair costs.
- Modification restrictions - leasing agreements often restrict modifications to the vehicle. If you need to customise the van for your business, leasing might not be the best option.