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Finance Options

We have a panel of lenders that enable us to offer you competitive rates and a swift underwriting decision. Lenders often use different credit reference agencies and also apply the information to an underwriting scorecard differently – sometimes based upon the payment history of similar existing customers. Consequently we don’t take no for an answer and exhaust all avenues. Also different lenders sometimes have different products and profiles, for example, some will offer 48 month finance whereas another lender may offer 60 month finance. Consequently we will utilise the best terms for the product and you the customer. All of our lenders tend to be household names and High Street banks that you will recognise. At present we do not accept finance applications online due to the confidential nature of the information. However our sales staff will be delighted to take your details over the telephone and get them over to the finance houses either by secure fax or input into a secure online facility. We offer Hire Purchase, Contract Purchase, Finance Lease, Contract Hire, Lease Purchase and Full Payout Finance Lease.


Hire Purchase

If ownership is a priority then this is a cost-effective route to purchasing your vehicle.

  • The deposit is the equivalent of the VAT for the vehicle (Lower deposits available)
  • Repayment period from 24 up to 60 months
  • Monthly repayments are VAT free VAT deposit reclaimable (VAT registered customers)
  • 100% of interest charges can be offset against taxable profits
  • Vehicle is an asset on your balance sheet and benefits from writing down allowances Year 1 – 45% Year 2 – 25% Year 3 – 25% etc…etc…
  • End of the contract period the vehicle is 100% owned by you.

 


 

Contract Purchase

Contract Purchase gives you all of the benefits of Hire Purchase (i.e. ownership of the vehicle) with all of the benefits of Contract Hire (i.e. no risk). You own the vehicle and we give you a guaranteed future value so at the end of term you can either hand the vehicle back and owe nothing or pay the balloon and keep it or sell it.

  • Deposits are typically 3 payments + all VAT (just like Hire Purchase).
  • Flexible Repayment period – up to 60 months.
  • Fixed Monthly Repayment.
  • Guaranteed Future Value of the vehicle (no risk of depreciation).
  • Monthly repayments are vat free.
  • VAT deposit reclaimable (VAT registered customers).
  • 100% of interest charges can be offset against taxable profits.
  • Vehicle is an asset on your balance sheet and benefits from the normal writing down allowances.
  • Ownership of vehicle will pass when the agreement is completed
  • Maintenance available if required
  • Road Fund License (Road Tax) included for the whole term

Finance Lease

A vehicle usage agreement that provides most of the benefits of an ownership agreement alongside potential tax benefits, minimum initial outlay and maximum flexibility.

  • The deposit can be the equivalent of 1 months rental in advance or up to 50% of vehicle cost.
  • Repayment period of between 18 and 60 months
  • VAT is paid on every rental, then claimed back quarterly (if VAT registered)
  • Rentals are 100% allowable against taxable profits
  • Facility can have a balloon profile, which defers a large payment to the end of the contract – thus reducing monthly rental and aiding cashflow
  • Vehicle sold or part-exchanged at end of contract with the hirer keeping 95% – 98% of the sales proceeds (ex. VAT)
  • Best for non-VAT registered business users looking for low initial deposit and maximum flexibility
  • No excess mileage penalties apply, is sensitive to mileage allowance to calculate balloon profile.

Contract Hire

Comprehensive, fixed cost solution where use of your commercial vehicle is important, but without the responsibilities of ownership. Essentially an operating lease with a full maintenance package.

  • The deposit can be the equivalent of 1 months rental in advance or up to 50% of vehicle cost.
  • Repayment period of between 18 and 60 months
  • Contract Hire is essentially the same as finance lease but with the added option of a maintenance package and without the hassle of having to sell the vehicle at the end of the contract. Sometimes called an operating lease.
  • Total budgetary control – fixed costs, as long as you stay within the mileage
  • Monthly repayments are subject to VAT – VAT recoverable
  • Rentals are 100% allowable against taxable profits
  • Fixed maintenance package to include services, repairs, tyres, dependant on contract type
  • At the end of the contract, simply hand the vehicle back
  • The vehicle is subjected to an inspection, where any reconditioning costs are charged to the customer – Ideal for VAT registered larger fleet operators.
  • The contract is mileage sensitive.

Lease Purchase

  • The deposit can be the equivalent of 1 months rental in advance or up to 50% of vehicle cost. Plus the VAT on vehicle.
  • Identical to the finance lease agreement.
  • Repayment period of between 18 and 60 months
  • Facility can have a balloon profile, which defers a large payment to the end of the contract – thus reducing monthly rental and aiding cashflow
  • At the end of the period, you sell the vehicle to a third party for a reasonable market value.
  • Forward a copy of your invoice, with a cheque for percentage of the sales proceeds to the finance company
  • You write down 100% of the cost and keep the vehicle at the end of the period.

Full Payout Finance Lease

This is a very tax efficient method of financing your vehicle. A relatively small initial rental, or deposit, normally 3 monthly rentals or repayments in advance, followed by the remainder of the rentals or repayments over the term, with a choice of up to 5 year terms available. If you are not VAT registered, it means that you pay the VAT monthly and similarly, VAT registered companies pay the VAT monthly, and claim it back quarterly. 100% of the monthly repayments are offset against taxable profits for the full term of the agreement. At the end of the term, you are legally obliged to sell the vehicle, as the taxman will not allow you the tax advantages of the lease as well as ownership of the vehicle at the end of the agreement. So, you choose who you sell the vehicle to, you negotiate the price, and then you pay the finance company up to 3% of the sale proceeds, and you keep 97%. Normally you would use the 97% of the sale proceeds that you have retained as the deposit on your next new van, but you are not obliged to do so and you can do whatever you want with it as it is your money. If you choose to part exchange your old van for a new van, which you can do at any time in the agreement, the supplier of the new van will request the settlement figure from your current finance company, and should the settlement figure be less than the market value of the part exchange, the difference can then be used as part or all of the deposit on the new van, whilst if the settlement is more than the market value of the part exchange, the difference can be added to the new finance agreement, but the deposit will then need to be paid in full. The new finance figures are calculated dependant upon the settlement figure, and the new supplier would then pay the finance company the up to 5% of the sale proceeds of the part exchange vehicle to close the previous agreement. Should you decide you want to keep your old vehicle after the term of the agreement has finished, without selling it, you can request what is called a Secondary/Peppercorn Rental figure from your finance company, which is normally noted on the agreement ,which you then pay annually instead of monthly, and it allows you to keep the vehicle for up to a further 2 years. This figure would normally be 1% of the orignal invoice price, but would only be paid once a year instead of once a month.


Can't decide which is the best finance method for you?

Contact  World of Vans today and one of our advisors will guide you through the best funding methods ,that suits your needs , just complete our online Enquiry Form.

 

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