Factors affecting the price of leasing a minibus

There are several factors that will affect the cost of leasing a minibus. This article goes through those factors so you have a better understanding of how your minibus leasing quote is determined and the decisions you can make that will affect your monthly costs.

It might also help you understand why some quotes for vehicles are lower or higher than others, so you can make like-for-like comparisons.

Firstly, let’s make sure we understand what leasing a minibus means, as opposed to hiring or renting, hire purchase, or outright purchase.

Leasing is a finance option that gives you the use of a brand-new minibus for a set monthly fee for a pre-determined contract length, 5 years for example. You are not buying the minibus, and at no point will you own it, at the end of the contract term you return the minibus and discuss a new contract for another brand-new bus.

When comparing minibus quotes it’s important to make sure you are comparing like-for-like as there are many factors that make up a quote. If they are not all the same, you may not be able to make a reasonable comparison.

Just like cars, there are higher spec options on minibuses. The Ford Transit minibus has a Leader and a Trend option. The Ford Transit Leader is the cost-effective, entry-level model. While both options have a reversing camera, sensors and reverse alarm, the Leader doesn’t have air conditioning, any privacy options, and a keyed start.

Whereas the Trend includes privacy glass, front and rear climate control, and a keyless start.

It is important to know what comes as standard with the minibuses you are choosing and what additional specifications, like air conditioning or privacy glass, your quote includes.

Typically, leasing contracts run from two to five years, or 24 to 60 months.
A longer minibus leasing contract will generally result in lower monthly payments. This is because the primary cost of a lease, the depreciation of its resale value, is spread over a greater number of months.

Payment profiles are how the initial payment and monthly payments are split. A payment profile of 3+59 means that the initial payment required for the minibus is three times the monthly payment, then 59 monthly payments will need to be made.

So, for example, if the minibus is quoted as £584 + VAT per month on a 3+59 payment profile you will pay a £1,752 + VAT initial payment, and then 59 months at £584 + VAT.

If you wish to make a greater initial payment, this may reduce your monthly payments. This is something you would need to discuss with your minibus broker. At Rivervale Minibus, we tend to keep initial payments low so that our clients are not faced with large upfront costs.

It’s important to understand that the initial payment is not a deposit, it is not refunded at any stage, and you are not buying the vehicle. This is just the lump sum payment you need to make at the beginning of your contract.

Every leased minibus or vehicle has a mileage allowance, a cap of the number of miles you expect to drive each year for the duration of your contract. Anything over this allowance will be chargeable, per mile, when you return the minibus.

Mileage allowances exist because increased mileage means increased depreciation and, as we have mentioned, one of the main costs of the lease is the depreciation of the value of the minibus. Higher mileage, or excess mileage, also results in higher maintenance costs. The more miles it does, the more value it loses.
As standard, most minibus quotes will be based on an annual mileage allowance of 5,000, because the majority of schools and organisations leasing vehicles stay local and do shorter runs.

An increase in the mileage allowance will mean an increase in the monthly costs and the initial payment. You can ask Rivervale Minibus for quotes with different mileage allowances 8,000 or 10,000 for example, if you are concerned that 5,000 would not be enough.

A funder-maintained contract, sometimes called a fully maintained contract, is where the costs of your annual MOT, regular services and replacement tyres (due to wear and tear) are included in the monthly payments.

If you choose to have a customer-maintained contract, you will be responsible for paying for your MOT’s and services and any replacement tyres you might need over the course of your contract.

A customer-maintained contract is typically less per month that a funder-maintained contract, but you will have to also budget for vehicle maintenance. 10-week minibus safety inspections are not usually included in leasing contracts; you will also need to budget for these to ensure your minibuses remain roadworthy under the requirements of either a Section 19 Permit or PSV Operator’s Licence.

Rivervale Minibus often include standard livery and logo in their leasing quotes, so you can have your minibuses delivered ready to go and advertise your organisation to the local community.

If you require a full or half wrap, to completely change the look or colour of your minibus, this will affect the price. Whether it is a one-off of payment for the wrap, or the additional cost is spread in your monthly payments.

Without a clear understanding of fair wear and tear, you may face unexpected additional charges when you return your minibus at the end of the contract, particularly if accidental damage, lack of maintenance, or negligence has been mistaken for ‘wear and tear’.

There is a fair wear and tear policy set out by the BVRLA that gives visual and detailed explanations to help you understand any issues you might need to address before returning your vehicle, so you don’t face additional charges.

Rivervale Minibus is happy to answer any questions you have about minibus leasing. We will work with you to find the best minibus for your needs and the right finance option. Give our friendly team a call on 01869 253744 or email minibus@rivervale.co.uk