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Van Leasing Explained

Van Leasing Explained

There’s an increasing number of highly capable electric vans on the market now, which means leasing a van is more popular than ever.

Whether you’re after a small van for life in the city, a medium van for daily call outs or a large van that can carry anything you throw at it, there are a wealth of options from top van manufacturers around the world, including Citroen, Ford, Vauxhall and Peugeot.

In this guide, we’ll explain everything related to leasing a van, from the costs to the benefits, as well as a step-by-step guide. Spoiler alert… it’s pretty easy.

How does van leasing work?

Van leasing is very similar to how car leasing works. It’s a long-term rental – a bit like leasing a flat.

Pay a deposit, agree annual mileage and monthly instalments (usually spread over 12, 24, 26, or 48 months) and then cover the cost of running it and settle up for any extra fees when you hand it back to the finance company at the end of the lease term. You’ll never own the van when you take a lease deal (although some contracts come with the option to purchase at the end).

Leasing a van is straightforward with plenty of options to tailor a lease to suit your needs. Here’s a rundown of the process:

  1. Pick a provider: There’s a wealth of options to choose from, including brokers or leasing specialists, like GRIDSERVE Car Leasing, as well as through your local dealership.
  2. Check your credit score: In order to secure finance you’ll need to make sure you have the credit rating to qualify. It’s worth doing this at the outset to avoid delays later down the line.
  3. Select your van: Do your research into what van fits the bill – size, payload and range are the big three to consider.
  4. Consider annual mileage: Work out how far you normally drive on a daily, weekly and yearly basis. When you sign up to a lease, you’ll need to agree mileage limits – if you exceed these over the course of the lease you may have to pay additional fees when the contract ends.
  5. Calculate deposit and lease length: If the lease requires it, work out what is the best deposit amount and then the term of lease required to bring the monthly payments down to an affordable rate. Leasing companies will often provide representative examples, but you can tailor these to suit your financial situation.
  6. Budget for monthly payments: Once you’re happy with the contract on offer, budget so that you can always pay off your monthly instalment in the same way you would your mortgage or phone contract.
  7. Compare deals: Before you agree to anything, shop around and make sure the deal you have is the best on offer. Companies may offer different rates, payment plans and T&Cs so always check you’re getting the right deal for you.
  8. Sign on the dotted line: Once you’ve dotted the Is and crossed the Ts, it’s time to sign the contract on your lease.
  9. Collect your van: This is the fun bit… it’s time to collect your keys and drive away in your new van. If you lease with GRIDSERVE, we’ll deliver direct to your door. Once your lease comes to an end, you’ll be able to hand it back and start the process again on a new model.

Can I lease a van for personal use?

Absolutely. While you might associate vans with business use and fleet leasing, you can lease a van for personal use just as easily. Many van models offer passenger versions, such as minibuses or lifestyle conversions which are much more suited to day-to-day family life than the 9-to-5.

At GRIDSERVE we offer personal leasing alongside business leasing deals, depending on your circumstances.

What are the benefits of leasing a van?

Whether you’re leasing a van for personal or business use, there’s a whole range of benefits to be had compared to buying it outright.

  • You pay less upfront: Compared to buying outright, you’ll start making savings straight away with a lease. Deposits start from as little as one month’s payment, rather than having to stump upwards of thousands for a new van.
  • It’s an affordable way to drive a new van: As upfront costs are lower and you’re spreading the cost, it means you’ll be able to drive a much newer van with the latest technology and safety kit than if you were buying outright.
  • You get a new van every few years: Hire contracts typically last between two and four years and at the end of each deal you can upgrade to a new vehicle without losing money in the same way you would when selling a van.
  • Monthly payments are fixed: Leasing allows you to budget and keep your finances in check by fixing the monthly instalments for the duration of the lease.
  • You won’t get stung by depreciation: With a lease you never own the vehicle, which means the depreciation a new van experiences as soon as it’s driven won’t affect you. There’s no need to worry about residual values and how much the vehicle will be worth after three years.
  • You don’t need to worry about selling: When you want to switch vans, it’s as simple as handing it back at the end of the contract rather than having to advertise or visit a dealer to trade-in and haggle over prices.
  • Road tax, breakdown and MOTs are included: All new lease vans are covered by a manufacturer’s warranty (at least three years as standard) which means most mechanical faults will be fixed. Road tax, breakdown cover and MOT costs are included in your lease payments, too, meaning you’ll only have to worry about routine servicing and maintenance.
  • No wear and tear to worry about: As your lease van will be new, there’s no need to be concerned about wear and tear, which can end up costing you thousands in repairs if you’re driving a used van.
  • You can take advantage of tax benefits: Business customers can take advantage of huge VAT benefits when leasing vans for company use. And while the Plug-in Car Grant was scrapped by the Government in June 2022, the Plug-in Van Grant is still active and means you can net a big discount when you lease an electric van.

What should I consider before leasing a van?

Like any financial commitment, you need to make sure that a lease deal is right for you. The benefits are big but it’s not for everyone – especially if your financial circumstances or vehicle requirements are likely to change during the course of a lease, as exit fees can be expensive. Here’s a few other things to consider before signing on the dotted line:

  • Know your budget: Leasing is an affordable way to get into a high-end, new vehicle but don’t stretch yourself. Be realistic about both your deposit (don’t empty all your savings) and what monthly payments you can afford, considering that you’re committed to this repayment for several years.
  • Do you need GAP insurance?: Guaranteed Asset Protection (GAP) insurance protects your bank balance if your lease van is stolen or written off. Your insurer will only pay out on their valuation of the van (which will take into account depreciation) and this will be significantly less than the amount it’s worth to the leasing company. GAP insurance will pay you the difference so you’re not out of pocket. It’s not essential but speak to your leasing company about their T&Cs to understand if it makes sense to take out cover.
  • Don’t underestimate your mileage: Excess mileage fees at the end of a lease can be an unpleasant cost when handing the van back so making sure you’ve agreed a realistic mileage limit at the start of the contract is vital. Think about your yearly mileage over the years and consider if your circumstances are likely to change.
  • Long or short contract?: As a general rule, a longer term lease will mean lower monthly payments across the length of a contract, but it also means you’re committed to that vehicle for that length of time. Think about how things might be different for you – both work and private life – to see if shorter term flexibility is more important than initial monthly savings. Cancellation fees can be expensive.
  • Look into a maintenance plan: With a lease, road tax, MOT and breakdown are all covered but scheduled servicing and maintenance is not. If you want to budget for this as well, then look at taking out a pre-paid plan for the duration of the lease which will spread the cost of servicing over the period.

Which van leasing options are available?

Van leasing is commonly categorised under two main finance types: Personal Contract Hire (PCH) and Personal Contract Purchase (PCP).

Personal Contract Hire (PCH)

PCH is a hire plan that can offer attractive monthly payments but you do not own the van at the end of the agreement – this is the most traditional form of leasing. There’s likely no deposit although you may have to pay a rental fee upfront (normally equivalent to a few months of instalments). Before your lease you’ll agree annual mileage, fixed monthly payments and the length of the term. At the end of the contract – normally between two and four years – you hand the van back. 

Personal Contract Purchase (PCP)

PCP is a finance plan where customers have the option to buy the van at the end of the lease. You’ll likely have to put down a deposit, anywhere from 0 to 40% of the value, with monthly payments then making up the remainder of the lease. You agree annual mileage, fixed monthly payments and length of lease up front. When the contract ends, unlike a PCH, you’ll have the option of making a “balloon payment” to keep the van and become the new owner. This final payment is optional and if you choose to hand the van back, you can use this amount (known as the Guaranteed Minimum Future Value) towards the deposit of a new lease.

How much does it cost to lease a van?

The cost depends on a huge number of factors, including which model of van you opt for, whether you’re leasing through a business, the length of your contract and mileage limits.

The cheapest van leasing deals vary month to month with many companies providing offers when new stock comes in, as well as special zero deposit contracts. As a guide, the smallest monthly fee you’ll pay is around £300 for a small van like the Peugeot e-Partner on a three- or four-year lease deal, while it’ll be a little more for a mid-sized van, like the Vauxhall e-Vivaro. There will be another step up in monthly payments for a large van like the Citroen e-Relay.

How long does it take to deliver a van?

Delivery times are one of the great things about leasing, as if you order one that we have in-stock then you could be driving away in a brand new van within a month. This is much quicker than going to a dealer and ordering it from the factory, where you’ll join a build queue which could take several months.

That said, there’s no hard and fast rule about delivery times as each van is different. We’ll be able to give you a rough estimation when you’re picking your model and then we’ll keep you updated the whole way through your order.

Why choose GRIDSERVE for your van leasing deal?

There are plenty of providers to choose from when it comes to leasing an electric van for your business but there are a few things that make GRIDSERVE Car and Van Leasing a little bit different. Here’s why we think you should partner with us:

  • Plant power: We plant 100 trees for every new lease.
  • Fully charged: We’re experts in all things EV and you can combine your lease with charging on the GRIDSERVE Electric Highway – plus we can support with charging solutions, such as at a depot.
  • Expenses made easy: Charge regularly on the GRIDSERVE Electric Highway and you can sign up to our automated digital receipts service to get charging sessions sent direct to your inbox.
  • Sun-to-Wheel: Our industry-leading chargers are powered exclusively by net zero carbon energy – part of our sun-to-wheel ecosystem.
  • Help at hand: We’ll be there to support you throughout your lease with our exceptional customer support.
  • All inclusive: When you lease with us, we offer leasing contracts that include road tax, insurance and maintenance to take the stress out of running your van.

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