Finance Lease

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Finance lease

Finance lease is the most popular payment method with the Swiss Vans customers but it can be complicated to understand. So, we’ll try to make it simple.

It is ideal for small businesses and sole traders who can’t pay the full cost of a van upfront. Some companies will also be eligible to reclaim any tax they have paid on their commercial vehicle if they are VAT-registered.

Businesses gain control of a van during the hire agreement, using it as their own while having it on the books as an asset. However, the finance company remain the owners of the vehicle.

What is finance lease?

The cost of the vehicle is spread out over an agreed period of time (usually 3-4 years) with fixed monthly payments. You can opt to include a balloon payment at the end of your contract which can lower your monthly payments.

At the end of the agreement, the vehicle will need to be sold to a third party on behalf of the finance company. If the van is sold for more than the value of the final balloon payment then you can benefit from the equity. Then, you can get yourself in a brand new vehicle by taking the equity from the sale of your van and putting it towards a new lease deal.

However, if the van is sold for less than the agreed residual value then you will be liable for this shortfall. It is also possible to buy the van back from the third party yourself at the end of the deal.

Advantages of finance lease

  • Brand new vehicle.
  • Low initial payment.
  • Minimal capital expenditure.
  • Accurate monthly budgeting with fixed monthly payments.
  • Option of a balloon payment to lower monthly payments.
  • Tax can be reclaimed on commercial vehicles by VAT-registered businesses.
  • Can keep most of the equity following the sale of the vehicle at the end of your contract.

Please note: A commercial vehicle is classed as a vehicle with a weight which is greater than 3.5 tonnes or capable of shifting a payload of over a tonne.

Disadvantages of finance lease

  • You don’t own the vehicle.
  • Operating costs are your responsibility.
  • The only accepted level of insurance is fully comprehensive.
  • There is a risk of negative equity should you request to settle the agreement early.

What is a balloon payment?

A balloon payment is an agreed sum which is due at the end of a finance lease deal. This enables you to have lower monthly payments. However, the balloon payment is usually paid off with the resale of the vehicle. If you have excessive damage or mileage, this can affect the resale value. If the vehicle is sold for less than the balloon payment, you will be liable to make up the remainder.

Our sales team are experts on finance lease so they’ll be able to answer any further questions you may have. We have other van leasing options if finance lease isn’t for you.

Camper Van Finance
Swiss Vans
Wildtrack
Ford Vans
Ford Custom Vans
Lease hire vans
Transit Custom Lease Hire


Van Finance

7  Ways Of Van Finance  

Most of our competitors tend to be leasing franchises that all sell the same “specials” that tend to be basic vans purchased at the same time by the hundred. Often the vans you are offered have sat around a while. They tend to prefer contract hire as it locks you into them for some time.
We work via banks rather than by these franchises so we are not as tied in so can offer more of an array of van finance deals. This is why our vans are fresher and  deals better. There is no leasing franchise taking a cut.
All methods are tax deductible. All methods you should really have GAP Insurance Policy in case the vehicle is written off. Many commercial insurance policies will not pay new for old.

  1. Hire purchase – VAT down or VAT deferred . HP is a great way to actually buy a van. If your VAT registered claim the whole VAT amount back within three months.   Click Here.
  2. Contract Hire – This is more popular on cars than vans. Many customers think there is no credit check but there is. Its better for large fleets and doesn’t offer any advantage for less than fleets of 10. If you want to change over 10 vehicles in one go and they are basic then please get in touch. Click here for contract hire.
  3.  Lease purchase. Not always the best deal as some manufacturers offer discounts  that cannot be used on lease purchase. Its just like HP but with a final payment and once it’s paid you get automatic ownership. It’s better once again for VAT registered businesses especially if you want a T6.1 for example to keep at the end and convert to a motorhome. Sometimes a pre registered van is cheaper. Click here
  4. Finance Lease – By far the most popular method as it attracts the lowest payments . It’s gets the largest discounts from manufacturers same as contract hire. However you can fit accessories many of which you cant n contract hire
  5. Operational Lease – Is just like finance lease however you can hand back the vehicle at the end. Some of our Mercedes vans are like this
  6. Asset Finance – We can finance many products not just vans
  7. Credit Limit – Pre approve your van purchases 90 days in advance. Useful  for example if you have a contract tender.

GAP Insurance

If you write a vehicle off in say year one the insurance company may well pay you less than the settlement value. Thus through no fault of your own you may need to buy a older cheaper van to reach the same monthly payment. Click Here to buy a GAP Policy