Finance Lease is a flexible option which gives you the use, but not ownership, of a van during the period of the contract as the van remains in the ownership of the finance company. Every month you pay an agreed ‘rental’ amount which is determined by the initial cost of the van, how long the lease will last for and the end balloon payment. The usual length of the agreement (the primary period of hire) is between two and five years. Deposits are not taken under a finance lease, but advance rentals are usually paid at the start of the agreement.
Finance Lease is a good option for businesses that rely heavily on their vans, either as they cover many miles, or the van could see a lot of wear and tear. With the intensity of use that drainage companies have, and the nature of the work, the fact that Finance Lease offers no mileage restrictions is an attractive prospect. If you’re VAT registered, the VAT paid on monthly rentals is reclaimable as well.”
At the end of the contract, you have the following options:
With a Contract Hire agreement you will always have to hand the vehicle back to the leasing company.
SO WHATS THE BEST OPTION FOR ME?
Not everyone is going to run their van into the ground. With Finance Lease you have far more control over how you manage your van and will reap the benefits over the longer term. With the more common Contract Hire, you are simply paying for the privilege of looking after your van for which you will receive no reward at the end of the lease.
Ultimately, the choice is yours and we always recommend you seek professional advice before making any final decisions.
If you need further information or require comparative quotes on both finance options contact us today.
