Calculate monthly van lease payments and total leasing costs. Compare business contract hire (BCH) vs finance lease for commercial vans in the UK.
Van Leasing Calculator UK 2025/26
Estimated Monthly Payment (ex VAT)
Van Leasing UK — 2025/26
Van leasing (business contract hire) allows businesses to use a van for a fixed monthly payment without owning it. At the end of the lease term, you return the van. Monthly payments are typically 50–100% VAT reclaimable for VAT-registered businesses.
Typical Monthly Lease Costs (2025)
Van Type
Ex VAT/month
Term
Small van (Ford Transit Connect)
£150–250
36 months
Medium van (VW Transporter)
£300–450
36 months
Large van (Ford Transit)
£250–400
36 months
Electric van (Maxus e-Deliver)
£350–500
36 months
Frequently Asked Questions
What is a van lease?
A van lease (business contract hire) is a long-term rental agreement. You pay fixed monthly payments to use a van, return it at the end of the term, and never own it.
Can VAT-registered businesses reclaim VAT on van leasing?
Yes — VAT-registered businesses can reclaim 100% of the VAT on van lease payments (vans used exclusively for business). This significantly reduces the effective monthly cost.
What is the difference between van lease and van hire purchase?
With hire purchase, you own the van at the end. With a lease (BCH), you return the van. Leasing has lower monthly payments; hire purchase builds equity.
Is van leasing tax deductible?
Monthly lease payments are 100% tax deductible as a business expense (subject to the van being used for business purposes), reducing your tax bill.
What happens if I go over the mileage limit?
Excess mileage charges apply — typically 5–15p per mile over the contracted annual mileage. Agree a realistic mileage upfront to avoid penalties.
What is included in a van lease?
Typically just the use of the vehicle. Road tax, servicing, tyres, insurance, and fuel are usually separate unless you take a fully-maintained lease package.
Can sole traders lease a van?
Yes — sole traders can lease a van. Monthly payments are a deductible business expense. You can also claim 18% capital allowances for a purchased van as an alternative.
What credit score do I need to lease a van?
Leasing companies typically require a good to excellent credit history. Poor credit may require a larger initial payment or result in declined applications.
Can I terminate a van lease early?
Early termination usually incurs a penalty, typically 50% of remaining payments. Read the contract carefully before signing.
What is the typical van lease initial payment?
Usually 1–9 months' payment upfront. A 3-month initial reduces monthly payments and lowers risk for the leasing company. Larger initials reduce monthly costs.
Is van leasing cheaper than buying outright?
Leasing preserves capital and gives access to newer vans more frequently. Buying outright avoids monthly costs but ties up capital. For most businesses, leasing is more cash-flow efficient.
What is a finance lease vs operating lease for vans?
A finance lease (or hire purchase) transfers risk to the lessee — residual risk is yours. An operating lease (BCH) — the leasing company takes residual risk. BCH is most common for small businesses.