That’s why we offer a range of van finance options so you can choose the finance option that suits you.
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Information is available on the following Van Finance options:
Van Finance Lease | Hire Purchase | Contract Hire
Finance Lease
> This facility provides the customer with all the benefits of ownership with minimum deposit and maximum flexibility.
> Deposits are usually the equivalent of three rentals, but can be any amount whatsoever
> Repayment period normally up to 48 months
> VAT is paid monthly, then claimed as normal if VAT registered
> Rentals are 100% allowable against taxable profits
> Facility can have a balloon profile, which defers a payment to the end of the contract - thus reducing monthly rental and aiding cash flow
> Vehicle sold or part-exchanged at end of contract hirer benefits from 95% of sales proceeds (ex. VAT)
> Ideal for non-VAT registered business users looking for low initial deposit and maximum flexibility
> Periods up to 60 months
Finance Lease Advantages:
More transparent and flexible than Contract Hire
Payment patterns can be structured to match customer needs
Can incorporate Balloon Payment, reducing monthly costs
Additional credit linePeriods of up to 60 months
Finance Lease Disadvantages:
Customer exposed to risks of ownership
Unexpected maintenance costs
Sales proceeds may not match final Balloon requirements
Hire Purchase
> If ownership is a priority, Hire Purchase is a cost-effective route to purchasing your new or used Van:
> Flexible Repayment period – normally up to 60 months.
> Fixed Monthly Repayment aids your budgetary control and cash flow.
> Monthly repayments are VAT free
> VAT deposit reclaimable (VAT registered customers)
> All of the interest charges can be offset against taxable profits.
Hire Purchase Advantages:
Any profit at disposal retained
Interest element offset against taxable benefit
Additional credit lineCustomer claims Writing Down Allowance
Capital allowances can be reclaimed on Assets purchased
Hire Purchase Disadvantages:
Potentially large deposit required
Administration burden remains with the customer
Customer liable for RV risk
Vehicles are On Balance Sheet lending, which may inhibit further borrowing
Contract Hire
A comprehensive, fixed cost solution where use of your commercial vehicle is important, but without the responsibilities of ownership. Contract Hire is essentially an operating lease with a full maintenance package.
> Deposits are anything from 3 rentals upwards.
> Total budgetary control - fixed costs, as long as you stay within the mileage.
> Monthly repayments are subject to VAT – then claimed back if VAT registered.
> Rentals are 100% allowable against taxable profits.
> Fixed maintenance package to include all services, repairs, tyres, dependant on contract type.
> At the end of the contract, you simply hand the vehicle back.
> The vehicle is subjected to an inspection on return where any reconditioning costs are charged to you.
Contract Hire Advantages:
Little to no risk as residual risk is borne by leasing company
Low initial outlayBudget control – fixed costs
Administration burden borne by leasing company
Contract Hire Disadvantages:
Early termination and excess mileage charges
Unsuitable for companies with unpredictable mileages
Customer does not own vehicle
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