Comparison
Four ways to put a van on the road — flexi hire, contract hire, finance lease, or buying it outright. They suit different positions, and the right one depends on how settled your requirement is, how your accountant treats the cost, and how much risk you want to carry. Here's the straight version.
The decision
Putting a van on the road for a business is really a question of two things: how long you'll genuinely need it, and who you want carrying the risk on its value. Flexi hire and contract hire are both rental — you never own the van, and the supplier or funder carries the depreciation. A finance lease is a funding product where you take on most of that value risk yourself. Buying — outright or on hire purchase — means the van is your asset from day one or from the final payment.
The common mistake runs both ways. Committing to a multi-year lease because the monthly looks low, then paying to exit early when a contract changes. Or buying a van outright and tying up cash on an asset that loses value while it sits between jobs. The right route follows the shape of the requirement, not the headline monthly figure.
Side by side
"Leasing" usually means contract hire — an operating lease where you hand the van back at the end. A finance lease is different: you carry the van's value and typically sell it at the end. Both are shown separately below.
What it is
Who owns the van
Typical term
Exit before the end
Upfront cost
Monthly cost (relative)
Maintenance and servicing
Mileage
Who carries depreciation
On the balance sheet (FRS 102, periods from 1 Jan 2026)
From accounting periods beginning on or after 1 January 2026, revised FRS 102 brings almost all leases onto the balance sheet, including for small companies. Short-term hire of 12 months or less is exempt.
VAT on a van or pickup
VAT on a car
Van figures assume business use; HMRC tolerates incidental private use. Car treatment reflects HMRC's assumption of some private use.
How you get tax relief
Best for
Where it doesn't fit
This is general information, not tax or accounting advice. VAT recovery and balance-sheet treatment depend on your actual business use and the structure of the agreement — confirm with your accountant before deciding.
What changed in 2026
For years, one of the standard arguments for contract hire was that it stayed off your balance sheet. For accounting periods beginning on or after 1 January 2026, that's largely no longer true. Under the revised FRS 102 — the standard most UK small and medium companies report under — the split between operating and finance leases has been removed for the business taking the lease. Almost all leases now appear on the balance sheet as a right-of-use asset and a matching liability.
This applies to small companies too, not only large ones. The practical effect is on gearing and the ratios lenders look at, even though the cash you pay hasn't changed. The one carve-out worth knowing: short-term leases of 12 months or less are exempt — which is exactly where genuinely short-term flexi hire keeps an edge a multi-year contract no longer has. If balance-sheet treatment matters to you, this is worth a conversation with your accountant before you sign a long agreement.
VAT
The biggest tax difference between these routes often isn't the route — it's whether you're putting a van or a car on the road. On a van, pickup, or other commercial vehicle used for business, a VAT-registered company can usually reclaim 100% of the VAT, whether you hire, lease, or buy it. HMRC accepts incidental private use, like commuting, as long as the vehicle is genuinely a business one.
A car is treated as if it has private use built in. On a lease or hire, you can usually reclaim only 50% of the VAT on the rental element. On a purchase, the VAT is generally blocked entirely unless the car is used wholly for business. Maintenance billed separately is recoverable in full either way. Where the requirement could be met by a commercial vehicle rather than a car, the VAT position alone often makes the decision.
FAQs
Next step
If hire is the right route, submit your enquiry once. A person at UVH reviews it and makes one introduction to an independent supplier suited to the term, vehicle, and operating area you describe. Your agreement is with the supplier, not with us. If buying or a finance lease suits you better, your accountant or a funder is the right next call — and we'd rather tell you that than waste your time.
Related hire routes
Continue the Comparison
How an introduction works