[Scottish Cleaning Service]

I will be looking at buying a new van this year but unsure what to do. HP, Lease or buy it outright. I would like to lease a new van but I don't think I can bolt down a tank nor cut a hole for my hose to travel through. Any ideas most welcome.

[Spruce]

I will be looking at buying a new van this year but unsure what to do. HP, Lease or buy it outright. I would like to lease a new van but I don't think I can bolt down a tank nor cut a hole for my hose to travel through. Any ideas most welcome.

This is my opinion and may not be the opinion of others.

HP and Lease options allow you to spread the cost of a replacement vehicle over a few years. The repayments are also tax-deductible as an expense which basically translates to writing the cost of the van off (depreciation) over the payment period. The other thing to bear in mind is a final payment. If you paid that off in one lump sum, how does it affect that future year's tax return? Only you can answers those questions.

Leasing is another thing to be careful about. There are leasing deals and leasing deals. Firstly, a monthly lease excludes VAT, so you end up paying VAT on the interest portion of the finance as well as the price of the van. Some leases do not allow you to own the van at the end of the lease. Salesmen will tell you otherwise to get the deal. Then we used to sell a lease purchase which legally allowed you to own the vehicle after the lease concluded. But again, beware of the final payment or the balloon payment.

If you buy outright, you need to speak to an accountant to how you can depreciate the vehicle over a period of time (Write down allowance.) I believe its 14% per year at the moment, dropped from 18%. Annual Investment Allowance (AIA) allows you to claim the full value of the vehicle in one tax year which isn't the way to go for a sole trader IMHO.

Whether you fit the tank or have a business do it, you/they are going to drill holes in the floor to secure your tank properly. If you buy a van, the dealer will usually try to sell you ply-lining, which is just screwed down with self drill screws into the floor and sides. At least if you have a qualified fitter to fit the tank, he will know where to fit it inside the van, so your axles aren't overloaded. At least when you drill holes to secure the tank, then hopefully the holes will be painted to prevent rust, which is more than they do when screwing down ply lining.

[PHILIP HARDY]

Best way to buy  a van,
(unusually) I completely disagree with Spruce on many points.
Leasing/contract hire is an absolute No NO,  from paying Vat, over priced, ridiculous mileage restrictions, to the final bombshell, them charging you for a complete respray on return, for a few small scratches (and it will get these),
Leasing is financial suicide,

Buying a better van that what you need is also a money trap. as is buying a van on finance. You lose both the depreciation and the interest on the loan.

You need to pay CASH (what you can afford), get the best bodywork but don't worry too much about higher mileage as for our work, high mileage is not an issue, having six working doors and a bit of size to carry and access equipment if more beneficial, a slightly bigger van than you think you need rarely proves a negative.
If you dont know a lot about vans take someone with you to look or have it checked by an independent mechanic,
For the fittings you will do a cheaper job by doing it yourself but finding someone to fit the tank/electrics/poleholders.etc and paying them, will get a better job done.
Whatever type you chose value for money will be the overriding objective, dont consider resale value as if its Ok you will probably keep it till it is no longer viable .
Signs to look for- scruffy interior and torn/damaged seats =Big Nono
Service history =good
Clutch, all our vans have needed a new clutch at some point, if the prospective purchase has had a replacement fitted recently that's a benefit, as the down time and inconvenience is annoying,
Tyres, 4 good tyres, preferably of the same make good sign the vans been maintained professionally.

The van market is competitive so Autotrader is a good start, just don't tell them you want to pay cash as retailers make as much money from the finance and part X as the sale, (I have been known to string em along by asking about finance to get a discount) you been Scottish probably will know about this
 
Happy huntin.

[Spruce]

Best way to buy  a van,
(unusually) I completely disagree with Spruce on many points.
Leasing/contract hire is an absolute No NO,  from paying Vat, over priced, ridiculous mileage restrictions, to the final bombshell, them charging you for a complete respray on return, for a few small scratches (and it will get these),
Leasing is financial suicide,

Buying a better van that what you need is also a money trap. as is buying a van on finance. You lose both the depreciation and the interest on the loan.

You need to pay CASH (what you can afford), get the best bodywork but don't worry too much about higher mileage as for our work, high mileage is not an issue, having six working doors and a bit of size to carry and access equipment if more beneficial, a slightly bigger van than you think you need rarely proves a negative.
If you dont know a lot about vans take someone with you to look or have it checked by an independent mechanic,
For the fittings you will do a cheaper job by doing it yourself but finding someone to fit the tank/electrics/poleholders.etc and paying them, will get a better job done.
Whatever type you chose value for money will be the overriding objective, dont consider resale value as if its Ok you will probably keep it till it is no longer viable .
Signs to look for- scruffy interior and torn/damaged seats =Big Nono
Service history =good
Clutch, all our vans have needed a new clutch at some point, if the prospective purchase has had a replacement fitted recently that's a benefit, as the down time and inconvenience is annoying,
Tyres, 4 good tyres, preferably of the same make good sign the vans been maintained professionally.

The van market is competitive so Autotrader is a good start, just don't tell them you want to pay cash as retailers make as much money from the finance and part X as the sale, (I have been known to string em along by asking about finance to get a discount) you been Scottish probably will know about this
 
Happy huntin.

I appreciate that some will have a totally different opinion to others on this. And that's OK.

I have always bought a second hand van for cash. I know that if something happens to me and I can't work for a few months (like right now for me), I don't have to worry about paying a vehicle debt off. The van is just sitting on the driveway. We have always paid cash for our family car as well ever since we have been in England these past 32 years. Currently, the family car is a 53 plate Citroen Xsara with 115k on the clock.

However, on previous posts, Scottish has mentioned he was considering buying a new van. The high purchase cost of a new van does tend to lend itself to some form of finance.

When I worked for Citroën, lease purchase was a form of leasing I would always suggest as the van was registered in the user's name and was the owner's responsibility to do with it what he wanted. He could keep it and sell it or trade it in at a later date. Once the lease purchase period was up, the finance house had no further interest in the vehicle.

I agree, never touch a standard lease or contract hire. HP is usually expensive due to the interest charges.

All I'm saying is that whatever Scottish decides, he needs to fully investigate each option so he is fully aware of what he is getting into and what the end result is. He needs to investigate how he can depreciate the value of the van each year to get the best tax return.

[Stoots]

Obvioulsy buying cash outright is the cheapest (unless your money could earn more in savings that the rate of the loan/finance, unlkely)

Best idea is to not buy a new one and buy an old one, even with repairs you`ll be better off than paying the depreciation.

[Scottish Cleaning Service]

I bought my Crafter which was 18 months old back when there was a credit crunch and Gordon reduced the vat to 15% and have never looked back. I think it looks like a pre registered one with few miles on the clock I will be going for.  Probably around £35k which I can save up this year as my mortgage ends in March so don't want to take on any debt until after that.

My van is going great but the rust is going to get it in the end.

I noticed I could lease a Crafter for £350 but didn't read the small print.

In the end one can't go wrong buying it outright and then I can modify it. Thanks all.

[KS Cleaning]

With the prices of vans nowadays I wouldn’t buy brand new as there is too much depreciation. I bought brand new in July 19 and sold privately last month, total depreciation £13k in 6 and a half years. You would probably lose that in under 2 years on a new van now. I opted for a 1 year old van this time with 1000 miles on the clock.
The monthly repayments on a new van using PCP etc might look appealing, but be sure to dig deeper to find out the true overall cost, for a non VAT registered sole trader this isn’t the way to go IMO.
If you have the funds I would buy a nearly new van outright if I were you, avoid taking finance from a garage as they will charge around 10% interest on a used vehicle. If you do need finance you’d be better with a personal loan.
I’m guessing with you being in Scotland and regularly ‘trousering’ big money along with your pension income you will have hammered through the 42% tax bracket? Should be decent tax relief on the purchase then.

[tlwcs]

You’ll need 2 mate. 

[Splash and dash]

Obvioulsy buying cash outright is the cheapest (unless your money could earn more in savings that the rate of the loan/finance, unlkely)

Best idea is to not buy a new one and buy an old one, even with repairs you`ll be better off than paying the depreciation.

Quite often these days you will get a better  deal paying some of the cost of the vehicle on there finance rather than cash outright sale it works out cheaper as they give you a much better price that’s what I have found with my last two cars .

[dazmond]

Just get a business finance lease over 5 years and hand the van back after with no balloon payment to pay. You pay around 3 months rental upfront and you ll have a brand new van on your drive within a month. All monthly rentals are tax deductable. If you want to keep it after 5 years just keep paying the monthly rental. No mileage allowances on this type of lease.

Or would you rather pay 40k all at once?....

[Tam1872]

Really depends on how long your planning on keeping it for. If you plan to keep it 6 years plus. Then the best and cheapest option is buying it outright.

If you plan on changing it every 3 or 4 years then leasing is your best option.