March 23, 2020
Looking for van finance and want to own the van at the end of the contract? You’ll be looking for van hire purchase. Our team of new van experts at Vansdirect takes a closer look at this incredibly popular way to finance your new van.
Selecting a new van for your business is an exciting time, however it can also be stressful, with you needing to take in to consideration a number of factors including load volume, fuel type, fuel economy to name just a few. Then it comes to van finance, where do you even start? There are a number of van finance options available including: van leasing, van contract hire and van hire purchase.
Not to panic, in this article Vansdirect takes a closer look at one of the most popular ways to finance your new van, hire purchase (HP).
As far as van finance goes, van hire purchase is the least complicated, you firstly pay an initial payment (or deposit), then the remainder of the balance is split equally over a period of your choice (2,3,4 or 5 years), with payments agreed at the beginning of your van finance agreement. At the end of the term the van is then yours to keep, HP is the only of the van finance options which allows you to keep the van at the end of the contract term.
By spreading the purchase of a new van over a number of years, you are able to manage your budget for the van which also appears as an asset on your balance sheet.
Unlike a van lease agreement, the residual value of the van at the end of the contract is not taken into account with van HP. Your monthly payments are determined by the price of the van, the amount of deposit you have paid and the length of the term. So monthly payments would be lower if taking the agreement out over a 5 year term, than over 3 year term.
There are also no mileage restrictions in place with van HP, so you can do as much or as little mileage as you require, as the van is technically yours there are also no restrictions on sign writing or wrapping your van with your company livery.
If your business is VAT registered then the VAT deposit can be reclaimed, you can then off-set 100% of the interest charges against taxable profits and interest is then reclaimed against your tax bill.
Looking for a new van finance bargain? Your search is over! At Vansdirect we have a massive range of cheap vans for sale with a range of van finance options available including van leasing, van contract hire and van hire purchase. Simply fill in a contact form or call us on 0800 169 69 95 to get the ball rolling today!