No Deposit Van Leasing Explained
If you run a small business, a van can be your biggest outlay after premises. "No deposit van leasing" sounds like a way to avoid it, so here is what it actually means and what to watch for.
No deposit does not mean nothing to pay
Van contract hire does not have a deposit in the way a purchase does. You pay an initial rental at the start of the agreement, which is a set number of monthly payments paid up front. It is also called an advance rental.
When people search for no deposit van leasing, they usually want the lowest possible payment at the start. On our deals the lowest option is 1 initial rental, which means one monthly payment up front. That is not zero, and we do not offer a van lease with nothing at all to pay at the start.
How advance rentals change your price
On every deal page you can choose 1, 3, 6, 9 or 12 initial rentals:
- Fewer initial rentals means less to pay at the start, with a higher monthly rental.
- More initial rentals means more to pay at the start, with a lower monthly rental.
The funder recovers the same overall amount across the agreement, so paying less early means more is spread over the monthly rentals. Our prices start on 9 initial rentals, so choose 1 in the configurator to see the lowest payment at the start.
Compare the total, not just the monthly figure
A lower payment at the start can make a lease feel cheaper without making it cheaper. To compare two quotes for the same van, term and mileage, add the initial rental to every monthly rental in the term. The quote with fewer initial rentals can cost more overall. What you gain is cash in the bank at the start, which is the point for many small businesses.
The sole trader angle
Sole traders and small firms often have little spare cash and uneven income. Keeping the initial rental low can mean you start work with a new van without draining your account, and you can budget around one fixed monthly rental afterwards.
Sole traders can apply for business van contract hire. Approval depends on status and a credit check, which may include your personal credit file, and approval is never guaranteed.
VAT
A VAT-registered business can usually reclaim the VAT on van rentals, including the initial rental, where the van is used for business only. If the van has private use, the amount you can reclaim may be lower. Because the rules depend on your circumstances, check the detail with your accountant.
Cash flow against buying
Buying a van outright means a large payment on day one, or a loan. Leasing spreads the cost across the term, and a low initial rental keeps even the first payment small. You also have no resale to arrange, because the van goes back at the end. What you give up is ownership, and you must stay within your agreed mileage and return the van in fair condition.
Next steps
Our van leasing page explains the basics, and the no deposit van leasing page lists current deals, each with an initial rentals setting you can change. If you are weighing up whether to lease at all, read our guide to van leasing for small businesses, or how van leasing works for the step-by-step process.
Swiss Vans Ltd is authorised and regulated by the Financial Conduct Authority as a credit broker, not a lender. FRN 668283.