Whether you need a vehicle in order to help you with your day-to-day business operations, or to improve your company’s image, it is crucial that you obtain it at the right price and under the right terms. This is where vehicle finance can help.
Vehicle finance comes in a variety of guises, but any option will allow you to obtain a work vehicle without the substantial initial outlay that comes with purchasing outright. Instead, you pay for the vehicle through a series of fixed monthly instalments. This can help to keep cash flow in check and stops cash reserves from being depleted.
Various options are available for financing a company car, van or delivery vehicle, and choosing the right one for you and your business could save you a considerable sum of money over the time you use the vehicle. For some, making payments to eventually obtain full ownership of the car is the preferred option – for others, leasing may be the more prudent option.
We can help you find most suitable loan based on how you anticipate using the vehicle, how long you will need it for, and your financial position. What may be the best option for a small business requiring a single car for making long journeys across the country may be completely different to a building firm needing a fleet of vans. Some of the most common ways of financing a business vehicle are as follows:
Hire purchase allows you to pay for your vehicle through a series of monthly instalments, following which the vehicle will become legally yours. You will also be required to put down an initial deposit. Hire purchase can also make sense from a tax point of view, as the interest on the lease is tax-deductible.
An operating lease is aimed at those who require a piece of machinery, plant or equipment rather than a standard vehicle. Operating leases are designed for relatively short-term needs. You will not own the equipment at the end of the lease, meaning you will not have to worry about the effect of depreciation.
With a finance lease, a series of monthly instalments is made which take into account the price of the vehicle, the duration of the finance agreement, and the projected future value of the vehicle. Once the lease period is over, there is the option to keep the vehicle by making a final payment. There is also the option to sell the vehicle and retain the majority of the proceeds; this is typically somewhere in the region of 95% of the amount obtained in the sale.