What to check before you lease a van

Leasing a van through business contract hire is a common way to get a vehicle on the road without buying it outright. You pay a regular rental for an agreed period and mileage, then hand the van back at the end. It suits many businesses, but the agreement is a long commitment, and the details in it matter as much as the van itself.

This page covers what to check before you sign. It is general information, not advice on your own circumstances.

The options

Before looking at a specific van, it helps to be clear about which kind of finance you are comparing.

• Business contract hire: You rent the van for a fixed term and mileage. You do not own it at the end and you return it. Maintenance can be added in some cases as a separate package.
• Hire purchase: You pay in instalments and can own the van once the agreement is complete.
• Outright purchase: You pay the full cost up front, or from your own funds or a loan, and the van is yours straight away.
• Short-term rental: Flexible and brief, often by the week or month, usually for temporary needs.

Contract hire tends to suit businesses that want a newer van, a predictable rental and no responsibility for resale value. It suits less well if you want to own the van, modify it heavily, or expect to cover very high or unpredictable mileage.

Contract hire is also usually offered to business customers such as limited companies, sole traders and partnerships. Eligibility depends on the funder, and any application is subject to their credit checks and criteria.

What to check

Go through these points before you commit.

Term and mileage

• Check the length of the agreement and the annual mileage allowance. Be realistic about how far the van will actually travel.
• Ask what the excess mileage charge is per mile. Going over the allowance is one of the most common sources of unexpected cost.

What the rental includes

• Find out whether servicing, maintenance and tyres are included or whether you must arrange and pay for them yourself.
• Check whether road tax is covered, and whether breakdown cover is included.
• Insurance is normally your responsibility. Confirm the cover the funder requires.

Upfront payment

• Many agreements ask for an initial rental paid at the start. Check how many months' worth it is and how it affects the ongoing rental.
• Ask for the total amount payable over the whole term, not just the monthly figure.

Fair wear and tear and return conditions

• Read the funder's return standards. Vans used for trade often pick up dents, scrapes and interior marks.
• Ask what is treated as damage and how it is charged. Shelving, racking and signage may need to be removed and any marks made good.

Ending the agreement early

• Contract hire is not designed to be cancelled midway. Ask what early termination would cost and whether it is possible at all.

Van suitability

• Check payload, load space, dimensions and fuel type against your actual work.
• If you drive in low emission or clean air zones, check the van's emissions status.

Who you are dealing with

• Confirm whether the firm is the funder or a broker. contracthire.tv is a trading name of Swiss Vans Ltd, authorised and regulated by the Financial Conduct Authority (FRN 668283) as a credit broker, not a lender. It arranges agreements with finance providers.
• Check any broker's FCA status on the Financial Services Register.

Read the paperwork

• Read the full agreement and any terms you are unsure of before signing. Ask questions about anything unclear.

Next step

Once you know your likely term, mileage and the kind of van you need, you can compare quotes on a like-for-like basis. Make sure each one uses the same term, mileage, initial rental and maintenance arrangements, otherwise the figures will not be comparable.

If you would like help comparing options, you can make an enquiry with us. We will look at what you need and approach funders on your behalf. Whether an agreement is offered depends on the funder and their assessment of your business.

Questions people ask

Can I buy the van at the end of a contract hire agreement?

No. With business contract hire you return the van at the end. If you want to own it, hire purchase may be a better fit.

Is maintenance included in contract hire?

It depends on the agreement. Some include servicing and maintenance, others do not, so check what is covered before you sign.

What happens if I go over my mileage allowance?

You will usually be charged an excess mileage rate for each extra mile. The rate is set out in your agreement, so check it before you commit.

Can a sole trader lease a van?

Many funders accept sole traders as well as limited companies, but each has its own criteria and checks. Acceptance is not certain and depends on the funder's assessment.