A work van is among the most important investments, but you will have to decide on whether to buy one or to engage a contractor. In fact, searching for a work van might feel like a real assault because the market is full of many sellers who are always fighting for your attention.
Each seller will customize the payment plans and offer to influence you to buy the van they offer. But broadly speaking, you will have two main options – buying a van or hiring a contractor.
Why buy a work van
Buying a work van is a great option. However, before buying one, you should be ready to invest a lot of cash and to keep the vehicle for many years. The full ownership of a work van provides you with the freedom of moving to any place and the ability to sell it if a need arises. Moreover, the purchase of a van involves on-going support that will be of great benefit. Some vans will come with a warranty and roadside assistance. If you need to maximize the van storage, you can start with heavy-duty van shelving in Melbourne, a company that specalises in van racking and storage for tradesman.
Why buying a business van might be not a good decision
An outright purchase will make it hard to budget espically for a start up tradesmand. You will budget for road tax, insurance, and the van’s depreciation. Why engage a contractor
After engaging a contractor, you will have many options that can match your individual situations. Contract hire offers you more flexibility on the details, such as the hire period and the package, which might take care of the road tax and any repair work. Moreover, you will manage to go for the contract van hire that matches the needs of your business and there will be no need for customizing anything.
One of the tax benefits of engaging a contractor relates to the ability to potentially claim 100 per cent GST back as a business expense – for people who have registered their business for GST. That is applicable if the van is for business use alone. And just like you expect when buying a van, you will be able to claim the amount you incur on the van as an expense when filing the tax returns. The rental payments will be the tax-deductible expense.
Contractor or buy?
Most entrepreneurs will favour either of the two options. A small business owner is usually more focused on building the business and therefore a contract hire can be a great choice. If buying several work vans within a few years is part of your business plan, buying will be the best option.
Buying offers more freedom but engaging a contractor will come with more security. No option is better than the other is. Go for what will match the needs of your business. Check your balance sheet and consider the pros and cons of each of the two options. You will know what will work for your case.