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Is it time for you to buy yourself a new van for your business fleet? If so, it’s important to consider your finance options beforehand. Choosing the most appropriate way to finance a van will not only make your purchase a practical investment but you can find the best deal for your affordability.
Here are four van finance options to consider.
Cash purchase
If you can afford to finance a van outright, making a cash purchase may be the most practical option for you. Additionally, buying in cash means the van is yours and with this comes more flexibility as you aren’t tied into contract limits.
The benefits of making an outright purchase include:
- You can customise the van with your business name and details.
- You can claim the cost of buying a van as an expense against your income tax bill.
- You can sell your van whenever you choose.
Hire purchase
If you choose to hire purchase a van, this usually involves putting down a deposit (which is often 10%) and paying off the rest of the value via monthly instalments. The agreement can last anywhere from 12 months to 60 months. Once all of your payments are cleared, you will be offered an ‘option to purchase’ fee so until that is paid you will not fully own the vehicle.
The benefits of making a hire purchase include:
- Flexible repayment terms can fit in with your monthly budget.
- Hire purchase can be a good option for those with low credit scores.
- You don’t need a large sum of money to make a purchase.
Finance lease
If you want to grow your commercial fleet but don’t want to buy outright, a finance lease allows you to pay for the hire of a vehicle from a leasing company. It will remain as their property, however, you can receive tax benefits during your hire period.
The benefits of choosing a finance lease include:
- Fixed payments make it easy to stay within budget.
- The vehicle will appear as an asset on your balance sheet.
- There are usually no penalty charges for mileage or damage.
Contract hire
When you choose a van via contract hire you will need to hand the van back at the end of your contract. The leasing company is liable for associated risks so you don’t have to worry about anything going wrong with the vehicle and being handed a big bill. Your monthly payments are determined through forecast depreciation, calculated based on the original cost of the vehicle, the mileage it’s going to run and the length of the contract.
The benefits of choosing contract hire include:
- Corporation tax relief is available against the lease rental charges.
- You can eliminate most of the stresses and financial risks of vehicle ownership.
- Reduced car fleet administration.
At Vanaways, we understand that buying a van is a big investment. Our experienced team will help you find the right vehicle for your needs as well as a good finance option. As van finance experts, our sales team is here to guide you through the buying process. Get in touch with us today for more information.
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