Trends are showing that more tradespeople are opting out of buying their vehicles outright through cash or a loan and are favouring the leasing option instead. This is attractive because, for the same upfront cost of buying a second-hand van, people can get a brand new one. 

Leasing: the pros and cons

There are a few different ways that you can go about leasing a new vehicle, and a number of different contracts that you can go for. A personal contract is suited to sole traders, whilst business owners can go for a business contract. 

Contract Purchase

Once the vehicle has been chosen, the things to look at are the deposit size, contract length, number of miles driven per year and of course, finding out what the monthly contract fee will come to. 

Assuming that the van is well cared for and the maximum mileage is not exceeded, it will have a guaranteed value at the end of the lease. Once the contract has finished, the tradesperson can choose to walk away, buy the vehicle outright for an agreed amount or use its remaining value as a deposit on a contract for a newer vehicle. 

It’s worth noting that with most contracts, the tradesperson is expected to pay for the vehicle’s maintenance, insurance, road tax and other associated running costs. 

If you run your own limited company, there are business versions of contract purchase leases. The main difference is that by doing it through a business some elements of the cost can be offset against your company’s tax bill.

Business or personal contract hire

With this type of agreement, the vehicle is driven for an agreed period of time. This duration is known as a ‘lease period’. Even though it’s in your possession, you do not officially own the vehicle.

Fixed monthly payments are made over the period that contract runs, and once finished, the vehicle is returned. 

Many people find this agreement appealing as it means that they don’t have to worry about the eventual resale value of the actual car. As you don’t actually own the vehicle, once your contract is finished you can walk away without any extra obligations or a lump payment.

Are you looking for a new work vehicle? As a Stax customer, you can make the most of your StaxPerx membership and get an exclusive £200 cashback on any vehicle you lease with our partners, Vanarama. Log in to your StaxPerx platform to find out how to claim this offer.