Why Are Vans So Expensive?
The cost of commercial vans has increased significantly in recent years, with second-hand vans even selling for 20% more than usual. This has posed the question – why are vans so expensive to buy?
In this guide, we will explain the various reasons why vans have become so expensive to purchase while also offering alternatives, such as long-term van hire, which are more financially available.
Reasons Why Vans are So Expensive To Buy
There are two main reasons why purchasing a van has become so expensive, including:
Vehicle Material Shortages
During the COVID-19 pandemic, there have been significant material shortages, especially with global shortages of integrated semiconductor chip shortages which control everything from digital displays to control systems. There is also a shortage of metal and rubber, which has delayed new vehicle production, resulting in an imbalance in supply and demand. The lack of new vans means more business owners are focused on buying second-hand vehicles, which have increased significantly in price since 2020.
High Demand For Used Commercial Vans
After lockdown restrictions were lifted, there was a significant spike in demand for commercial vans after those who were furloughed or permitted to shelter were allowed to go back to work. Due to the lack of new vehicles and increased demand, many business owners or self-employed drivers have paid more than normal for a used van, especially in van auctions where prices have increased by 47% since May 2020.
Is It Better to Buy or Rent a Van?
With van costs on the rise, you may be wondering whether it is worth buying or renting a van for your business. To help you decide, here are the pros and cons of both buying and renting a van:
Buying a Van
Purchasing a van for business use can either involve paying the entire cost upfront or splitting the cost up into monthly payments over several years with a business contract purchase. The latter is a common option for small business owners who are VAT registered and wish to own their own vehicle.
- The vehicle you purchase is yours as long as you do not miss any payments
- You can sell the vehicle or trade it in if you wish to buy a new van
- You can make any changes you wish to the van
- You will be in charge of any maintenance or repairs which are costly
- Monthly van payments can be significantly higher than a long-term van rental
- The car will depreciate in value
- You may need to take out a loan to purchase the van
Renting a Van
Renting a van on a long-term basis is a popular choice for small business owners who wish to pay less for a commercial van, as long-term van rental is affordable. It is also a more flexible option, there are various van rental packages to choose from, and you can upgrade your van after the contract is up.
- The monthly cost is much lower than a traditional van purchase or loan agreement
- You are typically not responsible for any repairs or maintenance, as they are normally included in the contract
- There is no need to sell the van when you want to change it, as you can simply choose another van to rent
- You can drive a van that you may not have been able to afford otherwise
- There are some monthly or yearly mileage limits, so you need to make sure you choose the right mileage when agreeing to a contract
- It can be hard to get out a van rental contract easily, so it’s important that you choose the right vehicle for your business
- You won’t be able to sell your vehicle
Overall, the better option is a long-term van hire, as it is a much cheaper option, and you can also upgrade your van after your contract is up, without the hassle of selling it. Renting a van also offers great flexibility for your business, as you can change the vehicle type as soon as the contract is up. This will ensure you find the perfect van for your business without committing to large payments over a long period of time.
How to Find the Best Van Rental
Now you have an understanding of the many benefits of renting a commercial van, it’s time to start thinking about how to find the best van rentals. Here are some things you should consider when looking for a suitable long-term van rental:
- Look at the price and check to see if it is suited to your budget and needs
- Make sure they offer servicing, maintenance and minor repairs within the contract
- Check if they have no advanced rental payments, as this will save you on upfront costs
- See if the rental company offers a flexible rental contract that meets your requirements
- Make sure the mileage offered is suitable for your line of work
- Check there are no hidden costs, such as admin fees
Here at iCompario, we can help you find a high-quality van rental company that meets your requirements. All you need to do is get a quick, free vehicle hire quote, and we will match you with a recommended supplier who ticks all of the boxes for your business. This will ensure that you find the right van rental for your business, which will help you maximize your everyday operations and take your business to the next level.