How do business's make new vans pay
Discussion
As I've mentioned in other threads our van is now paid off, we've had it 3 years, done a million miles in it and although its fine for now we really could do with a new one.
Now I watch a few YouTube channels on other trades and one of them recently put a video out about debt, he was adamant that debt is good and it helps your business grow, he has 3 new vans and has just bought a cherry picker vehicle but I just don't get it.
On autotrader a newish van was £18K+VAT, the repayments were about £600 over 3 years, thats crazy money, you could mortgage a house for that. I immediately looked on right move and an £80K house was £600 over 10 years with a £8K deposit.
Leasing is the same whilst cheaper at about £300+ per month over 3 years you get something new but don't get to keep it at the end so no capital investment at all.
So where are the plus points, its seems the only advantage is so you can pose about in a new vehicle, how does it make any sense to do it this way when you could run your vehicle into the ground and just buy another one for about £4/5K when it does break. Yet all you see on the road are tradesmen in nearly new vans. I will put the caveat out there that for me personally if it needs a clutch or engine swap etc I'm capable of doing it all myself and I appreciate that not everyone can do that, even for simple servicing.
Now I watch a few YouTube channels on other trades and one of them recently put a video out about debt, he was adamant that debt is good and it helps your business grow, he has 3 new vans and has just bought a cherry picker vehicle but I just don't get it.
On autotrader a newish van was £18K+VAT, the repayments were about £600 over 3 years, thats crazy money, you could mortgage a house for that. I immediately looked on right move and an £80K house was £600 over 10 years with a £8K deposit.
Leasing is the same whilst cheaper at about £300+ per month over 3 years you get something new but don't get to keep it at the end so no capital investment at all.
So where are the plus points, its seems the only advantage is so you can pose about in a new vehicle, how does it make any sense to do it this way when you could run your vehicle into the ground and just buy another one for about £4/5K when it does break. Yet all you see on the road are tradesmen in nearly new vans. I will put the caveat out there that for me personally if it needs a clutch or engine swap etc I'm capable of doing it all myself and I appreciate that not everyone can do that, even for simple servicing.
scottyp123 said:
As I've mentioned in other threads our van is now paid off, we've had it 3 years, done a million miles in it and although its fine for now we really could do with a new one.
Now I watch a few YouTube channels on other trades and one of them recently put a video out about debt, he was adamant that debt is good and it helps your business grow, he has 3 new vans and has just bought a cherry picker vehicle but I just don't get it.
On autotrader a newish van was £18K+VAT, the repayments were about £600 over 3 years, thats crazy money, you could mortgage a house for that. I immediately looked on right move and an £80K house was £600 over 10 years with a £8K deposit.
Leasing is the same whilst cheaper at about £300+ per month over 3 years you get something new but don't get to keep it at the end so no capital investment at all.
So where are the plus points, its seems the only advantage is so you can pose about in a new vehicle, how does it make any sense to do it this way when you could run your vehicle into the ground and just buy another one for about £4/5K when it does break. Yet all you see on the road are tradesmen in nearly new vans. I will put the caveat out there that for me personally if it needs a clutch or engine swap etc I'm capable of doing it all myself and I appreciate that not everyone can do that, even for simple servicing.
I don’t buy new vans but do buy 1 year old ones. I buy virtually new ones because mine carry 5 - 9 guys to site. An old van broke down once and they didn’t get to site, I lost £600 profit, and it looked bad on my company because those guys didn’t get to site it stopped my client doing other work. Now I watch a few YouTube channels on other trades and one of them recently put a video out about debt, he was adamant that debt is good and it helps your business grow, he has 3 new vans and has just bought a cherry picker vehicle but I just don't get it.
On autotrader a newish van was £18K+VAT, the repayments were about £600 over 3 years, thats crazy money, you could mortgage a house for that. I immediately looked on right move and an £80K house was £600 over 10 years with a £8K deposit.
Leasing is the same whilst cheaper at about £300+ per month over 3 years you get something new but don't get to keep it at the end so no capital investment at all.
So where are the plus points, its seems the only advantage is so you can pose about in a new vehicle, how does it make any sense to do it this way when you could run your vehicle into the ground and just buy another one for about £4/5K when it does break. Yet all you see on the road are tradesmen in nearly new vans. I will put the caveat out there that for me personally if it needs a clutch or engine swap etc I'm capable of doing it all myself and I appreciate that not everyone can do that, even for simple servicing.
With the discounts available on new vans you'd be mad to buy 2nd hand. I got 27% off list price for a Fiat Ducato van I ordered in January. In addition, we can currently offset an extra 25% of the purchase price against tax (this is a temporary Covid measure). I'm not an accountant, but as I understand it this means that we can effectively offset 125% of the purchase price against our tax bill.
This only applies to commercial vehicles, not cars.
This only applies to commercial vehicles, not cars.
Saleen836 said:
At a guess I would say it has everything to do with tax!
Obviously you can claim it against your tax but you can do with other more worthwhile investments, things that might go up in value instead of down and you still need to pay for it all before you claim anything back. Its the same with tools, one person I know leases all his drills, they are about £100 per month, our drills are a few years old and still work perfectly, for what we have paid for our kit he has probably paid 5 times the amount now but he gets to show off his new Hilti drills to everyone. Ours still drill the same type of holes though.sunbeam alpine said:
With the discounts available on new vans you'd be mad to buy 2nd hand. I got 27% off list price for a Fiat Ducato van I ordered in January. In addition, we can currently offset an extra 25% of the purchase price against tax (this is a temporary Covid measure). I'm not an accountant, but as I understand it this means that we can effectively offset 125% of the purchase price against our tax bill.
This only applies to commercial vehicles, not cars.
A few people I know think that if you are going to have a tax bill of £20k at the year end then if you buy something for £20k then you won't pay any tax. I know its different anyway for vehicles with capital allowances and what not but it only reduces your taxable profits by that amount, not the whole tax bill, so you would only save about £6k long term by splashing out £20k, you are still £14k worse off.This only applies to commercial vehicles, not cars.
We generally buy pre-reg.
You get a brand new van at a reduced rate, with balance of warranty.
I can’t be buying used vans any longer as they have existing wear and tear which ultimately takes time off road to rectify. All it takes is one day lost and the loss of income more or less covers a monthly payment.
Of course COVID came along and screwed pre-reg vans which were around £13k to now £19k.
I am loathed to pay 50% more, but we need reliable vans for work, and we have to do what we have to do.
You get a brand new van at a reduced rate, with balance of warranty.
I can’t be buying used vans any longer as they have existing wear and tear which ultimately takes time off road to rectify. All it takes is one day lost and the loss of income more or less covers a monthly payment.
Of course COVID came along and screwed pre-reg vans which were around £13k to now £19k.
I am loathed to pay 50% more, but we need reliable vans for work, and we have to do what we have to do.
rufmeister said:
We generally buy pre-reg.
You get a brand new van at a reduced rate, with balance of warranty.
I can’t be buying used vans any longer as they have existing wear and tear which ultimately takes time off road to rectify. All it takes is one day lost and the loss of income more or less covers a monthly payment.
Of course COVID came along and screwed pre-reg vans which were around £13k to now £19k.
I am loathed to pay 50% more, but we need reliable vans for work, and we have to do what we have to do.
I can understand how a big company does it, each driver gets a new van and you still make a profit out of each driver but big firms have lots of people so can afford to make a small margin out of many people. Its how shops selling small stuff keep going by having many customers, if the customers totalled one a day then they would go bust.You get a brand new van at a reduced rate, with balance of warranty.
I can’t be buying used vans any longer as they have existing wear and tear which ultimately takes time off road to rectify. All it takes is one day lost and the loss of income more or less covers a monthly payment.
Of course COVID came along and screwed pre-reg vans which were around £13k to now £19k.
I am loathed to pay 50% more, but we need reliable vans for work, and we have to do what we have to do.
there are only two of us so we could end up working one day a week each just to pay for the stuff to enable us work the other four. There comes a point when you are better off being employed on less money but without the outlay and hassle, so many people must be working their socks off just to make money for others.
scottyp123 said:
On autotrader a newish van was £18K+VAT, the repayments were about £600 over 3 years, thats crazy money, you could mortgage a house for that. I immediately looked on right move and an £80K house was £600 over 10 years with a £8K deposit.
I bet an £18k van is nicer than an £80k house. And if you've got an £8k deposit the van will be £278 (plus interest) over 3 years, not £600.You've also assumed a 0% mortgage in the house example, but around 12% interest on the van.
scottyp123 said:
I can understand how a big company does it, each driver gets a new van and you still make a profit out of each driver but big firms have lots of people so can afford to make a small margin out of many people. Its how shops selling small stuff keep going by having many customers, if the customers totalled one a day then they would go bust.
there are only two of us so we could end up working one day a week each just to pay for the stuff to enable us work the other four. There comes a point when you are better off being employed on less money but without the outlay and hassle, so many people must be working their socks off just to make money for others.
There still is that point when you’re a growing company and you think you’ve cracked it! You have many “what’s the point” moments, financially and mentally, there are only two of us so we could end up working one day a week each just to pay for the stuff to enable us work the other four. There comes a point when you are better off being employed on less money but without the outlay and hassle, so many people must be working their socks off just to make money for others.
Depends on your business but ours relies on vehicles, without them we have no business, so we have to have decent vehicles, says he with a fleet of Renault Trafics
I'm a small business and chose to buy a used van. It costs me £0 per month and I claim a mileage allowance (which helps pay for any maintenance).
Had a chat with a salesman the other day who said owning a van is 'costing you money' as I could sell it and have a pile of cash. I pointed out its actually saving me £300+ per month...
Had a chat with a salesman the other day who said owning a van is 'costing you money' as I could sell it and have a pile of cash. I pointed out its actually saving me £300+ per month...
Just contract hire (lease) the cheapest van you can get, it's not your's so it doesn't really matter what brand it is, hand it back after 3-4 years and get another. Get all the vat back and offset the contract hire against tax. When I did my sums it wasn't much difference between this and buying new and taking the hit on depreciation. I work 1-2 days a month to pay for the van.
LarJammer said:
I'm a small business and chose to buy a used van. It costs me £0 per month and I claim a mileage allowance (which helps pay for any maintenance).
Had a chat with a salesman the other day who said owning a van is 'costing you money' as I could sell it and have a pile of cash. I pointed out its actually saving me £300+ per month...
You have to factor in the depreciation, after 3 years and many miles, what will it be worth? Yes the older the van the less it will depreciate, but many trades can't get away with old vans anymore, have to be euro 6 and reliable. Had a chat with a salesman the other day who said owning a van is 'costing you money' as I could sell it and have a pile of cash. I pointed out its actually saving me £300+ per month...
Maybe we have been lucky long term but out van is a 2015 dispatch, aircon, cruise etc. We bought it 3 years ago for about £5.5K with 100,000 miles on it (£2K down and £120 a month), now its got 185k on and we have spent about £500 on servicing and the odd spare part. Because I've changed things like the gear linkage and serviced it regular it now drives better than it ever has done, could probably do with a clutch now its a bit jerky when setting off.
So in total with interest we paid about £6.5K but vans on autotrader even with our mileage are doing about £4K so we've only lost £2.5K over 3 years in theory thats £70 per month, You cant get a lease deal anywhere near that for 25K a year mileage. And everything is still deductible tax wise just the same. If we keep it another year we will be quids in.
The van before that was similar, £3k cost and sold 2 years later for £1500. Lease deals for what we need are about £300 per month but work that out over 3 years and its £10,800, you could buy a really nice van for that and it still be worth something when you sell it. I know in the grand scheme of things if there are two of you its only about £40 per week each but not having any work in the coming months or years concerns me too.
So in total with interest we paid about £6.5K but vans on autotrader even with our mileage are doing about £4K so we've only lost £2.5K over 3 years in theory thats £70 per month, You cant get a lease deal anywhere near that for 25K a year mileage. And everything is still deductible tax wise just the same. If we keep it another year we will be quids in.
The van before that was similar, £3k cost and sold 2 years later for £1500. Lease deals for what we need are about £300 per month but work that out over 3 years and its £10,800, you could buy a really nice van for that and it still be worth something when you sell it. I know in the grand scheme of things if there are two of you its only about £40 per week each but not having any work in the coming months or years concerns me too.
scottyp123 said:
As I've mentioned in other threads our van is now paid off, we've had it 3 years, done a million miles in it and although its fine for now we really could do with a new one.
Now I watch a few YouTube channels on other trades and one of them recently put a video out about debt, he was adamant that debt is good and it helps your business grow, he has 3 new vans and has just bought a cherry picker vehicle but I just don't get it.
On autotrader a newish van was £18K+VAT, the repayments were about £600 over 3 years, thats crazy money, you could mortgage a house for that. I immediately looked on right move and an £80K house was £600 over 10 years with a £8K deposit.
Leasing is the same whilst cheaper at about £300+ per month over 3 years you get something new but don't get to keep it at the end so no capital investment at all.
So where are the plus points, its seems the only advantage is so you can pose about in a new vehicle, how does it make any sense to do it this way when you could run your vehicle into the ground and just buy another one for about £4/5K when it does break. Yet all you see on the road are tradesmen in nearly new vans. I will put the caveat out there that for me personally if it needs a clutch or engine swap etc I'm capable of doing it all myself and I appreciate that not everyone can do that, even for simple servicing.
Ah, you watch Nagy? Now I watch a few YouTube channels on other trades and one of them recently put a video out about debt, he was adamant that debt is good and it helps your business grow, he has 3 new vans and has just bought a cherry picker vehicle but I just don't get it.
On autotrader a newish van was £18K+VAT, the repayments were about £600 over 3 years, thats crazy money, you could mortgage a house for that. I immediately looked on right move and an £80K house was £600 over 10 years with a £8K deposit.
Leasing is the same whilst cheaper at about £300+ per month over 3 years you get something new but don't get to keep it at the end so no capital investment at all.
So where are the plus points, its seems the only advantage is so you can pose about in a new vehicle, how does it make any sense to do it this way when you could run your vehicle into the ground and just buy another one for about £4/5K when it does break. Yet all you see on the road are tradesmen in nearly new vans. I will put the caveat out there that for me personally if it needs a clutch or engine swap etc I'm capable of doing it all myself and I appreciate that not everyone can do that, even for simple servicing.
journeymanpro said:
Ah, you watch Nagy?
Thats the one, I really don't get how he does it though, there only seems to be him and a couple of lads but he has at least two admin staff, 3 new vans, a big industrial unit, a motorbike, all the latest tools, probably a nice house and car too and even a cameraman. Either YouTube pays an absolute fortune or he is charging 10 times what I charge.thebraketester said:
How many subscribers do they have?
Nagy has got just under 100k, this is the video about debthttps://youtu.be/hN-ZYy2-kZQ?t=189
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