The Van Leasing Market & How It Works

Vehicle leasing and the marketing thereof have gone unnoticed the past few years due to very low interest rates. For most, the allure of leasing a van has been the advantage of lower monthly payments. With finance rates being low at this time, the best bet is to aim for traditional financing.

The world of van leasing has a long history of being confusing and difficult to grasp. Although the financial process around the leasing of a van can be confusing, there are some good deals out there to be had. It is this confusion that can leave you stranded once the transaction period is finished.

So to avoid the van leasing confusion, we can look at some basic points.

When leasing a vehicle, you pay, in monthly instalments, only the proportion of the value of the vehicle that you use during the life of the agreement. As part of the monthly repayments, the sales tax and financial charges will be included.

Yes, van finance or interest charges! In cheap van leasing vernacular this is known as the money factor.

What will determine how much you will use of the van's value, is how to obtain the residual value. A van's residual value is a predetermined number obtained at the end of the lease term and relates to the market value at that time.

For example: if a $20,000 van has a residual value of $11,000 at the end of your 36 month lease, this means that you will have used $9,000 of this van; so your monthly payments will be based on $9,000 over 36 months. What is obvious here is that the higher the residual value, the better the monthly payments are going to be for you.

More often than not the money that you will need to put down is your first monthly payment and a security deposit. It is optional of course for you to put more money down than recommended (cap cost reduction) which is similar to when purchasing, which will help to reduce monthly payments further.

For more information on leasing a van, including pick up truck leasing and vans of varying sizes, contact MWVC on 08450 500 800.