April 27, 2017

Van Contract Hire explained

New van finance

Vansdirect takes a closer look at Contract Hire…

As many of us know, choosing and buying a new van for your business can be exciting, confusing and on occasions stressful. When in reality, it should just be exciting.

Buying new assets for any business shows that you’re heading in the right direction, making money and growing your client base. However there are a lot of different finance options available and all of which can be very confusing. Don’t panic, here we explain one of the most popular finance choices when buying your new van.

Contract Hire structure

Contract Hire is the most common form of vehicle leasing in today’s market place. It is similar to finance lease in that you can have the use of a van for a fixed monthly cost over an agreed period of time, ranging from 2 to 5 year terms. However the most common are 3 year agreements. However, unlike finance lease you don’t have the option to buy the vehicle at the end of the agreement.

Here are the advantages of a contract hire agreement. We have also looked at the areas which you need to keep an eye on – neglect one of these areas and it could be costly to your business.

Advantages:

  • Lower monthly payments compared to the other types of finance. Handy for any business who want to keep outgoings low.
  • No balloon payments at the end. You can just walk away and source a new vehicle without any worries.
  • No deposit is required before you can start using the vehicle, compared to other types of finance this is unique.
  • New vehicles all the time. You’ll never drive a vehicle that’s older than the contract term. Means it’s good for the business in terms of reliability and company image.

Points to Consider:

  • Regular maintenance can be taken care of with a maintenance package which is available with nearly all contract hire deals. This means your LCV’s are kept in tip top condition and this in turn minimises staff downtime.
  • Inclusive breakdown cover, so no need to buy your own.
  • MOT’s and tyres again can be covered in the maintenance package if you choose to take it. However you may be liable to cover these if you choose a ‘Customer Maintained’ agreement.
  • Courtesy Vehicles again may and may not be covered. Just be aware of this and check before signing the agreement.

At Vansdirect we have a dedicated team of specialists ready and waiting to help you find your perfect van and finance deal. Don’t delay, contact us and get a deal today.