Van buy vs lease vs contract hire

Buying, leasing and contract hire all land on a monthly-feeling number, which makes them oddly hard to compare directly — one has a purchase price and a resale value years later, the others are pure rental with nothing to sell at the end. Putting all three over the same term turns three different pricing shapes into one number each: total cost of having a van on the road for that period.

What differs between the three

Buying (outright or on finance) means paying the full price up front or in instalments, covering maintenance separately, and getting a resale value back at the end that reduces the net cost — the van is an asset the whole time. A finance lease is pure rental: a monthly payment with no ownership and no resale value, and maintenance is usually still down to the business. Contract hire bundles maintenance into the monthly fee in most cases, trading a higher headline payment for one predictable number and nothing to arrange or budget for separately, but nothing to sell at the end either.

A worked example

Over 3 years: buying a £28,000 van with an expected £12,000 resale value, £800 a year in maintenance and £1,200 a year in insurance comes to £22,000 net. A £450-a-month lease with the same maintenance and insurance figures comes to £22,200. A £550-a-month contract hire deal, maintenance included, comes to £23,400. On these particular numbers buying comes out cheapest — but drop the resale value estimate, change the lease payment, or shift the term to five years and the ranking can easily flip.

What this isn't

This doesn't account for finance interest on a buy-on-credit deal, mileage caps and excess charges common on lease and contract hire agreements, VAT treatment (which differs by business structure and can be reclaimed differently across the three routes), or the resale value actually achieved, which is always an estimate until the van is sold. Get an up-to-date resale estimate and read the mileage terms on any lease or contract hire quote before deciding.