Van Hire Purchase
Van hire purchase is the most simple basic form of funding. Its a loan secured against the van. Its also named Lease Purchase but lease purchase is usually with a balloon at the end.
The goverment love hire purchase have a look here
Explode the Myths
VAT & Van Hire Purchase
Lets explode a few myths here as things have changed a lot in recent years. Traditionally VAT is placed upfront but in recent years this has relaxed and there are a few funders out there that will defer VAT for up to three months. In fact there are even a few funders now that will finance the VAT
A ballon is a slang but widely accepted term for a large final payment.
Some finance companies allow percentage of the purchase price while others use quite complicated equations and auction feeds.
Typically a balloon is worked out to about 85% of its auction value excluding any extras adjusted for mileage. Thus a driver who does 100,000 miles a year will have higher payments and a lower balloon that a 10,000 mile per annum driver
HP and Lease Purchase get a 100% tax write down all in the same year.
So it suits companies that want to shed as much as possible that financial year. Thus is you are a new start company or your profits are low finance lease is often a better method as it transfers some tax savings into later years.
Who does Van Hire Purchase Suit?
Flat rate VAT customers for sure. Large VAT registered companies.
Customers buying a motor home, intact anyone who wishes to take ownership of the van at the end. The payments are often a great deal higher than finance lease for example.
Finance Lease Declines
If you are declined on finance lease or contract hire we can still often get you a line of credit on HP. Its because a banking credit check is often different to an Experian one but our rates are far far lower than you will get from your high street lender. They rely on you walking in
Van Hire Purchase & Manufacturers
Van Lease Purchase
Lease Purchase Deposit
VAT upfront as a a minimum so this is favoured by a VAT registered business as it can be reclaimed. There are a few funders that will delay the VAT by up to three months.
A larger deposit can be placed by this method also
Lease Purchase Final Payments
A final payment is set in two ways and it really depends on the funder. Either a very large final payment based on the residual value of the van. This is mostly done by manufacturer finance companies and the mileage is often considered. Van Leasing
Or cheaper deals are often available. Unlike many van companies we can do things on van finance other can’t due to the way they buy their vehicles.
Lease purchase is very similar to van hire purchase except it has a balloon in most cases. A good example of this would be Ford Ranger Finance
Take ownership of the van with technically no deposit and write the van go down in one swift stroke. Lease Purchase and hire purchase are really the same product but lease purchase often has a balloon.