What are My Van Finance Options?
A van can be a vital business asset, but it is often also an expensive one. Van finance can make funding your vehicle more manageable and can even enable you to afford a better, higher-specification model.
There are different types of van finance available, including hire purchase, conditional sale and finance lease. Each of these options come with numerous benefits.
Van Finance Lease
Van finance lease is an agreement which enables you to pay to use a vehicle, while ownership is retained by the leasing company. The hirer will make monthly payments to the lessor for an agreed period of time and can choose to make a balloon payment to reduce the regular costs.
At the end of the agreement, the van can be either sold, or the contract can be extended, initiating a peppercorn rental period. Van finance lease is ideal for VAT-registered businesses due to certain tax benefits.
Advantages of van finance lease:
- Fixed monthly payments
- Low up-front and monthly payments
- Claim 100% of the VAT on commercial vehicles (if business is VAT registered)
- Repayment structure tailored to your business
- No penalty charges for excess mileage or damage at the end of the agreement
Hire Purchase/Conditional Sale
Van hire purchase and conditional sale agreements are best suited to businesses who want to eventually own the vehicle that they are financing. The cost of the vehicle will be split into an initial deposit and monthly instalments, which will be paid over a set period of time.
The vehicle will officially belong to the finance provider until the agreement comes to an end and all of the repayments have been made. At this point, ownership will be transferred, and you will become the legal owner of the van.
Advantages of hire purchase/conditional sale:
- Fixed monthly payments
- Ownership at the end of agreement
- No penalty charges for excess mileage or damage at the end of the agreement
- Choice of term lengths to suit your business
Contact Auto Capital to find out more about the van finance options that we offer, or apply for van finance by completing our online application form.