A Finance Lease is the process of leasing a vehicle on fixed monthly payments, VAT is charged the monthly rentals, not the initial cost of the vehicle.
The other option would be to pay lower monthly payments during the lease period is with a final “balloon” payment based on the expected resale value of the vehicle.
It will be your responsibility to sale the vehicle at the end of the contract. If the sale of the vehicle is above the predetermined final “balloon” payment then you will be claim the equity. If the sale of the vehicle is above the price of the final payment then you will need to cover the rest. The final fee will be calculated from the expected mileage over the contract.
The monthly rental payments of the vehicle are 100% VAT recoverable on all commercial vehicles. There is also no large deposit for the van and the monthly payments tend to be on the low side.
We will have the option to choose how long you would like a contract to last between 2-5 years providing you the flexibility to suit your budget. There is more flexibility where you can settle the agreement early.
Other benefits include no strict penalty costs for exceeding mileage or minor damages (just be aware that if there is significant damage to the vehicle or if you exceed mileage significantly). This is particularly useful if you are using a van where the condition is more than likely going to be affected during the agreement.
So, if you are a plumber, electrician, construction worker or working in any related trade and you are looking for a brand-new van then this might be the best financing option for you.
For more information and to start the process of applying for finance for your vehicle then please get in touch.
If you are VAT registered, then you can claim 100% VAT on the monthly payment back. If you are not VAT registered at the start of the process, but if you become VAT registered during the contract, then from that point onwards, you can claim the VAT back.
You can use van leasing whether you are VAT-registered or not. If you are business and VAT registered, then this is more beneficial with the fact you are eligible to claim the VAT back.
If you are looking to finance lease a van, then you will be responsible for the upkeep and maintenance of the van. It is important to note that manufacturers offer a standard 3-year warranty on any malfunctions on the manufacturer’s components.
You will not receive any penalties on the vehicle if there are scratches or dents. This is because it is you are responsibility for the vehicle. However, if you are looking to sell or part exchange the vehicle at the end of the contract then this will most likely negatively impact the cost.
While there are few options for choosing van leasing for your vehicle, you won’t be able to own the vehicle at the end of the contract. The options you get to take at the end of the contract include refinancing the final rental, selling the van privately and retaining the equity made after clearing the final rental or you can pay the final rental payment and enter a secondary period where you will pay a one-off yearly payment.
There are no restrictions on mileage when using Van Leasing, but it is important to note that your prediction of what your mileage will be for the agreed term is widely wrong you could be in negative equity. So, when you are in discussion with the Finance Lender, you recommend you quote the mileage to be as close as possible to what your current mileage is.
Insurance is not covered as part of the finance lease contract, so you will need to find your insurance. Make sure you have found your insurance before taking your van or pickup on the road.
