It depends on how long you keep vehicles and whether ownership matters to you. Buying on hire purchase means you own the van at the end and keep any residual value. Leasing or contract hire usually means lower regular payments and a simple handback, but you build no equity and face mileage and condition charges.
Buying tends to suit you if:
- You run vehicles well past the point where finance ends
- Your mileage is high or unpredictable
- The van will be signwritten, racked out or heavily modified
- You want an asset on the balance sheet to sell or part-exchange later
Leasing or contract hire tends to suit you if:
- You change vans every few years anyway
- You want fixed, predictable costs and possibly maintenance bundled in
- Your mileage is stable and can be estimated honestly
- You would rather not carry the risk of what the van is worth later
The risks sit on opposite sides. Own the van and you carry depreciation, repairs once any warranty ends, and the job of selling it. Lease it and you are exposed to excess mileage charges, damage assessments at handback, and the fact that you have nothing to show at the end of the term. Neither is universally cheaper — the comparison only works when you look at total cost across the years you actually intend to keep the vehicle.
VAT treatment and how the payments are handled in your accounts also differ between the options, so confirm the detail with your accountant before choosing.