Should You Buy or Lease a Van for Your Business
When your business needs a new van, choosing the make and model that you want is the easy part. It’s deciding how you can finance the vehicle that’s the difficult question. You have two primary options available to you: buying the vehicle outright or leasing it. Each have their own unique set of advantages and disadvantages.
In this post, we will cover each option in more detail, so that you can make a well-informed decision:
Advantages and Disadvantages of Buying
1. Freedom
Buying a van outright is the perfect choice for businesses who don’t want to deal with the kind of limitations leasing contracts entail, like annual mileage limits. You’ll also have the benefit of being able to sell your vehicle whenever you want to. Should the worst case scenario happen and your business fail, you won’t end up stuck with a long-lasting commitment that you need to deal with for a vehicle you may no longer have any use for.
2. Responsibilities
As they say, with freedom comes great responsibility. As well paying for the vehicle, you’ll also have to worry about other factors like maintenance and servicing, which leasing specialists like Van4Leasing include in their contracts. When it comes time to sell the vehicle, you’ll also have to factor in the cost of depreciation. The average vehicle loses approximately 20% of its value in the first year and another 15% each year after that.
Advantages and Disadvantages of Leasing
1. Choice
One of the primary advantages of leasing is that it allows businesses to use vehicles that might otherwise be out of their price range. Since you’ll pay on a monthly basis, you can better manage your cash flow to even incorporate the latest models of vehicles. These often include the best in new, digital technologies.
2. Restrictions
While you may have more choices when it comes to choosing the make and model of your vehicle, you’ll will have to obey by certain restrictions during the length of the contract. Not only with you have to agree upon an annual mileage limit, but you’ll also won’t be able to customize the vehicle in any permanent way. This means you may not be able to add decals to advertise your business in the way you want to.
Takeaway
Which approach you choose should depend heavily on the nature of your business. Make sure that take into account all of the pros and cons before you make your decision.
Make sure that you do your due diligence: Search the web and ask your fellow business owners for their insight.
About the Author
Ivan Widjaya A mobile entrepreneur who loves to work anytime, anywhere he wants. He runs several popular business blogs, make money online and live a geoarbitrage lifestyle. He typically works at home and travel with his family when he wants to, often without his business.
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