Eligibility & decisions
Business van leasing deposit and initial rental
On a business van lease, what people call the deposit is usually the initial payment: a multiple of the monthly rental, paid first. FleetMe quotes one month on courier agreements and three on commercial van and car agreements. It is the first payment rather than an extra, it is not refundable, and the monthly payments that follow it do not reduce in number because it is larger.
Your agreement is with FleetMe · we confirm your quote in writing · new limited companies considered
Is it a deposit or an initial rental?
A deposit implies money held and handed back. An initial rental is not that. It is the first payment under the agreement, calculated as a multiple of the monthly rental, and it is used up as rental. You do not get it back at the end, and it does not build equity in the vehicle, because under contract hire the vehicle is never yours to own.
Quotes are written as a profile. The first number is the initial payment, expressed as a multiple of the monthly rental. The second is how many monthly payments follow it. The initial payment is the first payment and covers month one whatever its size, so on a 12-month term eleven payments always follow: a 1+11 is one month up front then eleven monthly (twelve rentals in total), and a 3+11 is three months up front then eleven monthly (fourteen rentals in total). The two numbers do not add up to the term.
How does the profile change the monthly figure?
The larger the initial rental, the lower the monthly rental, because more of the total is paid at the start. The total cost across the term moves far less than most people expect, so choosing a profile is mainly a cash-flow decision rather than a way of paying less overall.
Illustration only, not a quote or a guide price for any vehicle: a van quoted on a 3+11 profile at £650 a month ex VAT needs £1,950 ex VAT as the initial payment, being three times the monthly, and comes to £9,100 ex VAT across the agreement, fourteen rentals, not twelve. The same van on a 1+11 needs £650 at the start and £7,800 in all, at a higher monthly rate. Your own quote sets out the exact figures for the vehicle, term and mileage you choose.
Business quotes show the ex-VAT figure as the headline, with the VAT-inclusive figure alongside.
Is VAT charged on the initial rental?
VAT is charged at the standard rate on every rental under a business contract hire agreement, and the initial payment is a rental, so the VAT on it falls due at the start along with it. On a 3+11 profile that means three months of VAT up front rather than one, which is worth planning for even if you expect to reclaim it.
If your business is VAT registered, VAT on the rentals for a commercial vehicle used for business is generally reclaimable. The position for cars is different and more restrictive, and conditions apply in both cases. Treat this as general information and confirm the treatment for your own circumstances with your accountant.
Which profile suits your business?
If cash is tight at the start, a young company, a month of tooling up, or customers who pay 60 days in arrears, a smaller initial rental keeps money in the business, at the cost of a higher monthly figure for the whole term.
If cash is available and it is the monthly figure that has to be managed, a larger initial rental brings it down. On a marginal application it can also change the answer, because it reduces the exposure across the term.
Do not put down so much that the business is short afterwards. A monthly rental you can meet comfortably in a quiet month is worth more than a low headline figure you can only just carry in a good one.
What else is payable at the start?
The initial rental is normally collected shortly after the vehicle is delivered, with the monthly rentals following on a set date each month. Your agreement states the exact dates before you sign it.
Vehicle excise duty for the contract term is normally included in business contract hire, and your quote states what is and is not included. Maintenance can be added as a separate itemised element if you want servicing, tyres and routine repairs inside the monthly figure.
Insurance is not included. You insure the vehicle, and cover needs to be in place before delivery.
Any fee payable is set out in your written quote before you commit. Nothing appears later that was not in front of you first.
Can you lease a van with a very small initial rental?
Low-initial profiles such as 1+11 exist and we will quote them where they are available. Expect a higher monthly rental in exchange, and expect the assessment to lean harder on evidenced affordability, because more of the commitment sits in the future.
We do not advertise no-deposit leasing as a headline. What we will do is quote the profiles genuinely available for your business and your vehicle, and tell you straight which of them are realistic.
How we work: FleetMe supplies the vehicle and the agreement is with us. Limited companies and LLPs take business contract hire; sole traders take vehicle hire. Either way the longest term is 12 months. Quotes are indicative until your vehicle, term, mileage and rental are confirmed in writing.
Who we can help: Good and fair credit profiles are the most straightforward. New limited companies with no trading history are considered. Commercial underwriting weighs the business and its directors alongside its filed accounts. None of that is a promise of approval, and we will always tell you if we cannot help.
General information about business vehicle leasing. It is not tax, accounting or legal advice. Your accountant should confirm how any of this applies to your business.
Questions, answered
What is an initial rental on a van lease?
The first payment under the agreement, calculated as a multiple of the monthly rental, commonly 3, 6, 9 or 12 months. It is rental paid in advance, not a returnable deposit.
What does 3+11 mean?
Three monthly rentals as the initial payment, then eleven further monthly payments, across a 12-month term. The two numbers do not add up to the term: the second is simply how many payments follow the first, which on a 12-month agreement is always eleven. A 3+11 therefore costs fourteen monthly rentals in all.
Is the initial rental refundable at the end?
No. It is rental, used up across the agreement, and it does not build equity in the vehicle because ownership stays with FleetMe throughout.
Is VAT payable on the initial rental?
Yes, at the standard rate and at the same time as the initial payment itself. On a 3+11 profile that is three months of VAT at the start, so it is worth budgeting for. VAT-registered businesses can generally reclaim VAT on rentals for a commercial vehicle used for business, check your own position with your accountant.
Does a bigger deposit lower the monthly rental?
Yes. A larger initial rental means less of the total is spread across the monthly payments, so the monthly figure falls. The total across the term changes much less, which makes it mainly a cash-flow decision.
Can I change the initial rental after I have ordered?
Ask before the agreement is signed and it can usually be requoted. Once the agreement is in place the profile is fixed, so it is worth settling before you commit.
Tell us about the business
One short form covering the vehicle, the term and the mileage you need. We come back with a written quote, and we aim to do that the same working day. We will tell you if we cannot help.
Enquiry received, one step to go.
We can put a guide figure together from what you’ve told us. To confirm the vehicle, the monthly rental and a delivery date in writing, we need your business details and the underwriting information.
Next step · about 5 minutes
Complete your business application
It’s pre-filled from your answers. Nothing is committed until we confirm your quote and you sign.
Continue to my application →No obligation · About 5 minutes
Prefer to leave it there? We’ll still be in touch about your enquiry.
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Guide information · last reviewed October 2026. Every business is different, so nothing here is a decision. We assess each enquiry on its own facts and confirm the outcome to you directly.