Used Van Finance: An Essential Guide
Running a successful business requires access to a range of resources and tools. One of these essential tools is a Used Van. Whether you are delivering products, transporting employees, or providing mobile services, a van is a crucial component of many business operations. But with the cost of a new van ranging from £10,000 to £40,000 or more, buying a van can be a significant financial investment. That’s where business van finance comes in.
What is Business Van Finance?
Business van finance is a financial product that enables companies to purchase a van without having to pay the full cost upfront. Instead, businesses can spread the cost of the vehicle over a set period of time, making it easier to manage their finances and avoid a large upfront payment.
There are several types of business van finance available, including hire purchase (HP), leasing, and contract hire. Each has its own advantages and disadvantages, so it’s important to consider your business’s needs and budget before making a decision.
Hire Purchase (HP)
Hire purchase is a type of finance agreement where the business pays for the van in instalments, typically over a period of two to five years. Once the final instalment is paid, the business becomes the owner of the van.
Advantages of Hire Purchase:
- The business becomes the owner of the van at the end of the agreement
- Fixed monthly payments make it easier to budget and manage finances
- No need to worry about disposing of the van at the end of the agreement
Disadvantages of Hire Purchase:
- The business may need to provide a deposit upfront
- If the business fails to make the payments, it could result in repossession of the van
Leasing
Leasing is a type of finance agreement where the business rents the van from a leasing company for a set period of time, usually two to four years. At the end of the agreement, the business may have the option to purchase the van or return it to the leasing company.
Advantages of Leasing:
- Lower monthly payments compared to hire purchase
- No need to worry about disposing of the van at the end of the agreement
- Regular upgrades to newer models are possible
Disadvantages of Leasing:
- The business does not become the owner of the van
- The business may need to pay a deposit upfront
- Mileage restrictions may apply
Contract Hire
Contract hire is a type of finance agreement where the business rents the van from a leasing company for a set period of time, usually two to four years. At the end of the agreement, the business returns the van to the leasing company.
Advantages of Contract Hire:
- Lower monthly payments compared to hire purchase
- No need to worry about disposing of the van at the end of the agreement
- Maintenance and repairs are often included in the agreement
Disadvantages of Contract Hire:
- The business does not become the owner of the van
- The business may need to pay a deposit upfront
- Mileage restrictions may apply
Conclusion
Business van finance is a great way for companies to purchase a van without having to make a large upfront payment. Whether you choose hire purchase, leasing, or contract hire, it’s important to consider your business’s needs and budget before making a decision. With the right finance solution, you can ensure that you have the right tools to help your business succeed.
How to apply for Van Finance?
Applying for Van Finance is very simple. Enter your details below or call 0161 8211478 to speak with one of our specialists.
