The short version
- Lowest monthly costUsually contract hire (leasing).
- Own it at the endHire purchase, or buying outright.
- Biggest lease catchMileage limits and damage charges at hand-back.
- Check firstClean air zones if you work in cities.
Your first van is one of the biggest buys of going self-employed. The right way to pay for it depends on your mileage, your cash and whether you want to own it.
Your options
| Option | Good for | Watch out for |
|---|---|---|
| Contract hire (lease) | Low monthly cost, new van, fixed budget | Mileage caps, damage charges, never own it |
| Hire purchase (HP) | Owning the van at the end | Higher monthly payments, interest |
| Lease purchase / balloon | Lower payments with option to own | Large final payment |
| Buy used outright | Lowest total cost if chosen well | Repairs, wear, ties up cash |
Leasing: read the small print
- Mileage: be realistic. Going over usually means a charge per mile at the end.
- Damage: vans come back with wear. Know the fair wear and tear guide before you sign.
- Initial payment: often several months up front.
- Maintenance packages: can be worth it for high-mileage work.
- Business or personal: business leases need you to be trading. VAT-registered businesses may be able to reclaim VAT. Ask your accountant.
Which van?
- Pick the size by your longest regular load (plasterboard, lengths of timber, ladders).
- Check payload if you carry heavy materials.
- If you work in cities, make sure it meets clean air zone and ULEZ rules.
- Electric vans can work well for short local routes. Check real-world range with a load on.
Quick answers
Is it cheaper to lease or buy a van?
Leasing usually has lower monthly costs. Buying, especially used, is often cheaper over the long term if you keep the van for years.
Can I lease a van as a new sole trader?
Some lenders want trading history. Others offer leases to new businesses, sometimes with a larger deposit.
Does a lease include insurance?
Usually not. Budget for business van insurance separately.