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What Is The Best Way To Buy A Van?

From builders and couriers to caterers and gardeners, a van can be essential for many people’s businesses. 

Whether you need one to carry supplies, deliver products or are even looking for one for personal use as a family vehicle or for travel, vans are practical, spacious and good to drive.

However, all this comes at a cost. So what’s the best way to buy a van? 

The answer is there are several ways and all have their pros and cons. From buying your van outright to financing or leasing, which is right for you? Let’s take a look at your options.

Buying a van with cash

The cheapest way to buy a van is to pay upfront in cash. This way, you’ll own the van immediately, won’t be charged any interest on a loan, credit card or finance agreement, and you won’t have to worry about monthly repayments.

However, there are some things to consider before you take this route. 

Naturally, if you’re paying for your van outright, you’ll make a significant dent in your savings. 

Before you do this, consider if you can afford to use the money you have and if you’d be able to cope financially if something went wrong. 

Also, consider loss of interest. If you have your savings tucked away in a high-interest account, you could lose that benefit and with low rate finance deals. 

Borrowing might not work out to be a more expensive option after all.

Buying a van on a credit card

Another option is to buy your van with a credit card. However, for this to be cost-effective, it would be best to purchase it on a credit card with a 0% interest rate. 

Remember, you’ll have to have a large enough credit limit too. 

If you use a credit card with a promotional 0% rate, factor in paying off the balance before it ends, or you could end up paying thousands of pounds more in interest.

Another thing to note is not all places will accept a credit card when purchasing a vehicle. And some may also charge a fee, so it’s best to ask first before deciding to use this method of payment.

Buying a van with a personal loan

A personal loan is when you borrow a set amount of money, usually from a bank or building society, so you can pay for something you need or want – like a van. 

An agreement is made with the lender to pay back the loan along with interest in monthly instalments over an agreed amount of time.

As a personal loan is unsecured, the interest rate on them tends to be a little higher, but if you have a decent credit score, you could be eligible for a better deal.

As with any form of borrowing, it’s a good idea to think about what would happen if your financial circumstances change in the future and you couldn’t make repayments. 

Defaults can have a lasting impact. So thinking about affordability first can ensure you don’t damage your credit rating or affect borrowing in the future.

Buying a van with hire purchase

If you want to own your van at the end of a finance agreement, hire purchase (HP) is one way to do it. 

A Hire Purchase agreement usually involves an agreed period of fixed monthly repayments. When the final repayment has been made, you own the van.

The larger deposit you put down, the lower the monthly repayments will be. Much like a standard loan, interest is added to the loan and factored into your monthly repayments.

As hire purchase is a secured loan, the lender owns the vehicle until all your payments have been made. 

So if your financial circumstances change for any reason and you can’t make your repayments, the van can be repossessed.

Hire purchase agreements also tend to run for a longer period, so there’s also the risk of more depreciation, higher running costs and maintenance before the van even belongs to you

Buying a van with personal contract purchase

With a personal contract purchase agreement (PCP), you can benefit from reasonably low monthly repayments. Of course, this depends on the van you choose, though.

Like with HP, you’ll pay fixed monthly repayments over a pre-agreed term. However, at the end of your PCP deal, you have the choice of paying a lump sum payment to own the van, part exchange it for a new van, or you can simply return it and walk away. 

This means it’s a little more flexible than some finance agreements. 

However, PCP finance usually comes with stipulations, such as mileage clauses. So if you’re using your van for work or travel purposes, it’s very important to be realistic about your mileage, as you’ll be charged for exceeding the limit if you decide to return it at the end.

Also, if you plan to return the van, it has to be in the same condition as when you first took out the agreement – normal wear and tear aside. Any additional damage will incur a charge.

Buying a van with personal contract hire or business contract hire

Also known as leasing, personal or business contract hire is based on a fixed-term contract where you essentially pay an agreed monthly amount to rent the van.

With this type of agreement, you never own the van. Once the term has ended, you return the vehicle to the supplier, and provided it’s in good condition and you haven’t exceeded the mileage limit, there’s nothing more to pay. 

It’s a good way to reduce monthly costs, and you can also include maintenance packages to escape the worry of any unexpected bills down the road.

For those who want a van to project a professional business image, PCH is ideal, as it means you can drive a new van every few years. 

And with business contract hire, you could be entitled to reclaim up to 100% of the VAT or take advantage of tax allowances, subject to terms and conditions. 

Lease purchase

Lease purchase works in a similar way to personal contract hire.

You pay a series of monthly instalments to effectively rent the van, but when the contract ends, there’s no option to hand it back. 

Instead, you have to pay off the balloon payment to own the vehicle or you could look to part exchange it for another.

It’s good for those who want lower monthly payments but would like to own the van in the future. 

Of course, as there’s a lump sum payment at the end of the agreement, it’s important to factor this into your budget.

 

 

Van finance at a glance

 Deposit requiredFixed monthly paymentsOwn van outrightSecured against vanMileage limitRisk of depreciationEarly settlement optionFines for damage
CashNoNoYesNoNoYesNoNo
Credit CardNoYesYesNoNoYesYesNo
Personal loanNoYesYesNoNoYesNoNo
Hire PurchaseNoYesYesYes NoYesYesNo
Personal Contract PurchaseNoYesOptionalYesYesYesYesYes
Personal / Business Contract HireNoYesNoYesYesNoNoYes
Lease PurchaseNoYesYesYesYesYesNoYes

How Hippo can help

Whether you buy or lease a van ultimately comes down to what makes more practical and financial sense for you.

Either way, we can help you pick the option that suits your needs. If you’re looking for finance, we can contact our panel of specialist lenders to help you get approved without damaging your credit score. 

If you want to lease, we have options for you there too. 

We have a range of vans from manufacturers such as Ford and Mitsubishi to Mercedes-Benz and Vauxhall.

Contact us today to see if we can help. 

Alternatively, get approved for your van finance without affecting your credit score first through our quick and easy online application. 

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Representative Example of Credit

We expect more than 51% of our customers to achieve this rate.

Loan Amount Total Cost of Credit Representative APR 60 Monthly Payments Deposit Amount Loan Term Total Amount Payable
£7,500 £3831 19.1% APR £188.85 £0 60 Months £11,331

All offers are subject to change at any time, you must be 18 or over and finance is subject to status, vehicle availability and terms and conditions apply. We can introduce you to a limited number of finance companies, a commission may be received. Failure to maintain payments may result in termination of your agreement and the vehicle being returned, this could affect your credit rating and make it more difficult to obtain credit in the future. All prices correct at time of publication.

We purchase a wide variety of vehicles from all over the country to ensure the best quality and value for our customers, all of our cars go through a thorough inspection process and if they do not meet our standards we do not sell them. We endeavour to inform our customers (where possible) the provenance of the vehicle they are buying and as such we will always inform you if the vehicle has previously been either an ex fleet or hire car. Should your vehicle be an ex hire/fleet car please do not be concerned as we would never value this vehicle differently when you come to part exchange it and there is no difference to the CAP valuation either.

You should try and estimate the distance you will travel as accurately as possible to try and avoid excess mileage charges at the end of your contract.

All pictures and/or photos and car descriptions on this site are for illustration and reference purposes only and are not necessarily the vehicle on offer. All offers are subject to change at any time and are subject to finance approval and vehicle availability. All prices correct at time of publication. E & OE.

Hippo Vehicle Solutions t/a Hippo Motor Finance is authorised and regulated by the Financial Conduct Authority. FRN 658076. We are a Credit Broker not a Lender and can introduce you to a limited number of lenders. Subject to status and to UK residents only (excl. the Channel Islands). Individuals must be 18 or over. Guarantees and indemnities may be required. We typically receive a fixed commission calculated by reference to the vehicle model, product or amount you borrow, for introducing you to a lender but this does not affect the interest charged on the agreement, all of which are set by the lender. Images for illustrative purposes only. Hippo Vehicle Solutions t/a Hippo Motor Finance is an Appointed Representative of AutoProtect (MBI) Limited for insurance distribution purposes. AutoProtect (MBI) Limited is authorised and regulated by the Financial Conduct Authority. Its firm reference number is 312143. You can check this at www.fca.org.uk

We endeavour to ensure that all information including the specifications and finance availability are accurate. Whilst we make every effort to display correct information we are aware that errors may occur occasionally. We are not able, therefore, to guarantee the accuracy of all information especially when given to us by third parties. If you do require clarification of some information you have seen on our website, please email us at info@hippomotorgroup.com . This does not affect your statutory rights.

We are a broker not a lender and our registered office is Unit 26 Trident Park, Trident Way, Blackburn, BB13NU.