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
Most van sales manufacturers in the UK offer less discount if you wish to own the van.
This is becuase it can affect the reseale value as in the case of Renault Vans and Citroen Vans
Nissan Navara Lease
New Mercedes Vito
Citroen Relay Low Loader
Electric VW Crafter
LDV Maxus Luton
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.
- 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. Sometimes a pre registered van is cheaper. Click Here.
- 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.
- 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
- 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
- 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
- Asset Finance – We can finance many products not just vans
- Credit Limit – Pre approve your van purchases 90 days in advance. Useful for example if you have a contract tender.
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