How Does Van Leasing Work?

When it comes to acquiring a van, buying one outright is not always the most financially viable option. Fortunately, van leasing offers a cost-effective way to access a van for both personal and business use without the burden of ownership. If you want to drive the latest models and specifications but limit your initial upfront costs, understanding how van leasing works could be the key to finding your perfect vehicle today. 

What Is Van Leasing?

Van leasing is a financial agreement whereby you or your business obtain exclusive use of a brand-new van in exchange for an initial payment followed by a series of regular monthly payments. The term of a van lease is fixed for a pre-agreed number of years and the van is returned to your chosen leasing company at the end of this contract. At this point, you can opt to upgrade your van with a new contract or extend your existing lease. 

Most van lease deals include a manufacturer’s warranty and road tax, offering drivers and businesses a cost-effective way to drive the latest models without excessive additional expense. It is your responsibility to arrange insurance and you may also wish to add an additional maintenance package to your van lease deal. Though this type of service will incur a slight additional cost, opting to include maintenance in a van lease deal gives total peace of mind that you won’t have to worry about costly issues that may arise during the duration of the term. 

Who Can Lease A Van?

Van leasing is available to anybody who holds a full UK Driving License, making it a popular choice for both business and personal use. Though different types of lease deals may be more suitable for one use over another, those that can lease a van are generally broken down into the following categories: 


Van leasing is a particularly popular choice for businesses looking to utilise a van without having to make a significant initial upfront investment. As well as providing the certainty of fixed monthly payments and the benefits that come with driving a new van, business van leasing also offers possible tax benefits. 


Though vans are typically thought of alongside business use, individuals can also lease vans for personal use. Vans can be the perfect vehicle for an individual who regularly moves large items and are popular for a range of recreational activities and hobbies. Unlike business van leasing, personal van lease payments are taxable which can make the monthly cost higher. However, leasing a van as an individual offers the benefit of access to a new van model without the excessive mileage that may come when buying a van second-hand. 

Sole Traders

Sole traders can also qualify for van leasing, providing they can meet the required affordability and credit checks. Sole trader van leases count as business leases and therefore provide a great way to benefit from the same tax advantages as larger organisations without needing to tie up a substantial amount of capital.  

Types Of Van Leasing Contracts

To get a van lease, you have to take out an appropriate contract. There are different types to choose from, depending on whether you are opting for a personal or business van lease and what you want to happen at the end of the fixed term. The types of van lease contracts include:

Van Contract Hire

Contract hire is typically the most popular way of leasing a van. This type of agreement can be made on a business or personal basis though it is most commonly associated with businesses. 

With contract hire, you agree to hire a van from a finance company for a fixed duration, typically between two and five years. You pay a monthly fee and must return the van to the finance company at the end of the contract. Providing you have kept the vehicle within fair wear and tear and not exceeded the annual mileage agreed at the outset of the lease, no additional charges will apply. There is also no depreciation risk with contract hire, meaning that you will not be liable for any reduction in value. 

Finance Lease

Finance lease agreements are a popular alternative where contract hire is not suitable. Like contract hire, a contract length and fixed monthly payment are agreed at the outset, but you also have the option to purchase the van at the end of the lease period for a predetermined sum. 

When the contract comes to an end, you can then purchase the van by paying this balloon payment or sell the van if it is no longer required. Do note that you will be liable for any depreciation when leasing a van through a finance lease. This means that you will have to cover any shortfall between the van’s value and the balloon payment should your asset have depreciated. 

Hire Purchase

You can also lease a van through a hire purchase agreement. This type of van lease contract is also suitable for those who want to own the van at the end of the fixed term. However, there is no requirement to make a balloon payment at the end of the agreement. Instead, term length and monthly payments are agreed upon at the start of the lease and the van becomes yours at the end of the agreement providing you pay a purchase fee which allows the ownership of the vehicle to be transferred to you. 

How To Lease A Van

With an initial understanding of how van leasing works, consider what brand and size van you need. Once you’ve got an idea of what type of vehicle you or your business requires, get in touch with a trustworthy lease broker. 

The team here at Intelligent Vehicle Finance have years of experience when it comes to van leasing and can help you find the very best deals on the market, tailored to your unique requirements. Whether you are looking for a personal or business van lease, get in touch with us to discuss your budget and requirements or browse our complete range of van lease deals online today.