VAUXHALL is improving its financial packages for van operators with the launch of Vauxhall Finance Lease today (03 April, 2013).
The new Vauxhall Finance Lease product will complement the existing Vauxhall Leasing contract hire and Vauxhall 4x4x4x4 hire purchase products.
Unlike a contract hire agreement, there are no end of lease fair wear and tear inspections
Richard Gwilliam, Vauxhall’s strategic marketing programmes manager, says that the new finance lease product offers van users more choice, greater flexibility and allows small van fleet operators to choose a financial profile that suits the current cash flow of their business.
“We’ve listened to our customers who wanted something more flexible than our current Vauxhall Leasing product,” said Richard.
“Essentially customers wanting a Vauxhall van can structure their payments depending on the size of the ‘balloon’ at the end of the payment term.
“For example, by fixing a larger balloon, customers can reduce their monthly payments. With a lower final balloon payment, the monthly rentals are higher.”
At the end of the lease term (see diagram on p2), Vauxhall Finance Lease customers can chose one of three options:
- Sell the van and if there’s more residual value than the agreed balloon, you receive a credit with the difference
- Asks Vauxhall Leasing to sell the van for you and if the sold value is greater than the agreed balloon you receive the difference (minus a modest admin fee)
- The final option is to settle the balloon but continue using the van on what’s called a ‘peppercorn rental’ of £100 a year.
Richard says Vauxhall Finance Lease is really useful for those small business users who are not sure how many miles they will be covering or suspect damage might be incurred by the van.
Unlike a contract hire agreement, there are no end of lease fair wear and tear inspections that could possibly result in a refurbishment charge, although Richard does warn that condition will affect the van’s resale value – and the potential to settle the final balloon payment.
Both the length of the business van finance term and advance payments are also flexible. The down payment can range from the equivalent of a one month’s rental to 12 monthly rentals in advance. The finance lease term can be anything from two to four years (or anything in between if required).
What are the key features of a Vauxhall Finance Lease?
- The van appears on your balance sheet as an asset
- VAT is recoverable on rentals (subject to certain restrictions)
- Rentals can be offset against profit (although there are no capital allowances)
- There are no mileage restrictions
- Flex the monthly payments to meet your firm’s cash flow needs
- Potential of van’s final value to exceed the final balloon payment
The flexibility of the Vauxhall Finance Lease
Below is a diagram showing the three options you have at the end of the finance lease: