You’ve got a decision to make. Your current van is out of warranty, costs more in repairs each month than your mobile phone bill, and you're staring at a dozen “offers” from dealers, brokers, and finance companies.
Some say “owning is better long-term.”
Others say “lease it, write off the VAT, and hand it back.”
And then there's PCP — the middle ground with the dreaded balloon payment at the end.
So what really makes sense in 2025 — leasing, PCP or buying a van on finance?
Let’s walk through it in real terms, using one of the most in-demand vans this year — the fully electric VW ID. Buzz Cargo — to compare options.
What Are Your Options?
Before we talk numbers, here’s a quick overview of what each method means for you as a business owner:
| Option | What it Means |
|---|---|
| Buying on Finance (HP/Loan) | You own the van outright after making full payments. Typically involves a higher deposit and larger monthly payments. |
| PCP (Personal Contract Purchase) | Lower monthly payments, but a large balloon payment if you want to keep the van at the end. |
| Leasing (PCH or Business Contract Hire) | You rent the van for a fixed period, then hand it back. You never own it, but payments are lower and tax-efficient. |
Real-World Scenario: Let’s Talk About Jamie
Jamie runs a courier business in Manchester. He drives 100 miles per day, operates in a ULEZ-compliant zone, and wants a new van that won't break the bank.
He’s looking at a VW ID. Buzz Cargo, a fully electric van with a ~250-mile range and excellent comfort for daily use. The question is — what’s the smartest way to fund it?
Head-to-Head Comparison – ID. Buzz Cargo Van
| Financing Method | Monthly Payment* | Upfront Cost | Ownership? | Total 3-Year Cost | Key Considerations |
|---|---|---|---|---|---|
| Buying (HP) | ~£850/month | £5,000+ deposit | ✅ Yes | ~£33,000 | Large cash commitment, full depreciation risk |
| PCP | ~£620/month | ~£4,000 + balloon (£14k) | ✅ Optional | ~£30,000–£33,000 | Balloon payment needed to own |
| Leasing (Business PCH) | ~£495/month +VAT | 3 months up front | ❌ No | ~£21,500 +VAT | Lower cost, 100% VAT reclaim, return at term end |
*Estimates based on 3-year term, 10,000 miles/year. Actual figures vary by credit, mileage and market rates.
Why Leasing Makes Sense for Many Businesses in 2025
-
Predictable fixed payments – no resale, no balloon headaches
-
No capital tied up – preserve cash flow or reinvest in your business
-
No risk of depreciation – simply hand it back
-
Full VAT reclaim (if VAT-registered)
-
EVs = lower Benefit-in-Kind tax (BiK) — 2% for the ID. Buzz Cargo
-
Quick swaps every 2–4 years — stay current and reliable
When PCP Might Work Better
-
You’re not sure if you want to keep the van
-
You want slightly lower payments than HP
-
You want the option of ownership, but with more flexibility
But beware — PCP often feels cheaper until that balloon payment hits. Jamie’s £620/month sounds good… until he has to come up with £14,000 at the end. He can refinance it — but that adds more interest.
Why Buying Isn’t Dead — But It’s Not for Everyone
Owning your van outright can make sense if:
-
You drive high miles and need no restrictions
-
You plan to keep the van 6+ years
-
You want to avoid finance contracts altogether
However, with vehicle technology evolving fast — especially for EVs — ownership means you're stuck with ageing kit and uncertain resale values.
What About Tax?
| Finance Method | VAT Recovery | BiK Tax Treatment | Claimable as Business Expense? |
|---|---|---|---|
| Buying | ❌ No | Capital allowances | Depreciation rules over several years |
| PCP | ❌ Limited | Similar to buying | Interest only may be claimable |
| Leasing (PCH) | ✅ Yes | 2% BiK for EVs | Full rental cost deductible (business) |
If you're VAT-registered, leasing gives you the cleanest and most efficient tax outcome — especially for EV vans.
Final Verdict: What Should You Do?
| Business Goal | Best Option |
|---|---|
| Keep a van for 6+ years | Buying |
| Want flexibility with possible ownership | PCP |
| Want lowest cost, no hassle, full tax use | Leasing (PCH) |
| Building an EV-friendly fleet | Leasing or PCP |
| Running a VAT-registered company | Leasing (Business) |
If you value simplicity, predictability, and tax savings, leasing is the clear winner for most UK small businesses — especially in 2025 when EV incentives are still strong.
Ready to Lease a VW ID. Buzz Cargo?
We offer flexible lease deals for sole traders, limited companies, and fleets.
-
Fast UK mainland delivery
-
Fixed pricing
-
Full EV salary sacrifice support
About Us
Established in 2009, our company specialises in premium vehicle leasing in the UK. Part of a large, privately owned Volkswagen and Audi dealership group, we leverage strong industry connections to secure some of the best car and commercial vehicle lease deals. We pride ourselves on matching businesses and drivers with the perfect vans for their needs—backed by unrivalled customer service and expertise.