MAIN FEATURE
such as drainage, this is a big issue, as many have been holding back replacing vans. If you’re an established drainage business, now is the time to review your fleet and plan appropriately. When reviewing your fleet, a balance should be made between ongoing maintenance costs and the impact of financing a new van. We’ve estimated that a drainage van should earn around £800 per day in income (obviously this varies company to company), so losing this revenue would be a substantial loss. Additionally, with garage waiting lists often extending to two or three weeks before you can even get your van in for repair, the cumulative effect can be thousands of pounds and put extra stress on your existing fleet to service your customer base. Short term van rental can bridge the gap, but long-
term planning is the key.”
The Basics – Purchasing vs Financing vs Rental
When buying a van, it’s best to start with the basics. Owning a van outright provides an instant benefit. Ownership removes any future capital costs associated with buying and secures the van for the long term. You can also add it to the balance sheet as a one-off cost and benefit from the tax allowances for that year. Whilst it’s an attractive prospect, buying outright is a large capital outlay – you either have the funds to pay for the van or you don’t. A new fully fitted drainage van would cost in the region of £40,000-£50,000 depending on the van purchased, set up and specific requirements. If you are
looking for something that has less regular future cost to the business, this could be an option. Careful planning is needed to make sure the resale timing of the vehicle is when it is at its peak.
For most businesses, financing is now a much more flexible option. Finance offers the chance to run a new or lower mileage van through monthly ‘rental’ payments. The cost can be spread over a set period. Rentals can be allocated as per customer need, and in some cases, by the end of the agreement the van can be owned outright.
“Financing a drainage van offers several attractive benefits for both start-ups and established businesses,” comments Jimmi Double, Director of Dyno-Rod East London. “Compared to buying a van outright, financing requires a
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As a busy drainage and plumbing franchise with over 70 vehicles in our fleet, it’s essential that the vans are fully equipped to support the teams to work effectively.”
| June 2024 |
www.draintraderltd.com
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