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How will you finance your next business van?

This content was provided on behalf of CB Online

TAKING your business on the road is challenging enough, but making the decision to purchase a bigger vehicle is a Doubledecker order! You need your life to be organised as you run errands and financing the right sized van will offer the safety, wide space and maneuverability you need to transport extra passengers, your equipment or products.

If you’re still mulling over your options, there are several tips you may want to consider to get the best financing deal available:


Van financing options

Hire Purchase – If you are unable to take advantage of current finance deals that have zero interest (requires good credit score, a larger deposit and larger monthly payments) you can take advantage other finance options. A hire purchase typically involves putting a small deposit down, most commonly £1500 (plus VAT) and then making monthly installments on your van for a specific number of years. Once the final payment is made, you have outright ownership of your van.

Contract Purchase – With this type of contract, you agree to pay a fixed amount each month for a set time. When you’ve made all of your payments, you must bring the van back to the lender or pay a balloon payment if you decide to keep it.

Finance Leasing – An alternative contract where you still have ownership of your van and you rent it on an agreed long term payment schedule.

The best way to determine how good a finance deal really is is to compare what you would pay for a van if you applied for a personal loan, versus the total amount payable on a financed van through a dealer to see which option offers the better value. Weighing the pros and cons first before signing up to forecourt finance is crucial to avoid regrets later.

When applying for personal loans, it is wise to step back and look at your credit history as a lender would. Are you creditworthy or are you credit risky? This question will help you decide who best to go to when applying for a personal loan since finance rates vary among lenders and is credit-based. Remember, the more credit inquiries you make, the more likely it affect your credit rating which could lower your chances of being approved.

Also, take the time to check the best personal loan rates currently available, as rates can vary widely. For example, a loan of £10,000 over five years has a rate of 8.9 per cent at Alliance & Leicester, an 8.2 per cent rate at Tesco Bank, and a 7.9 per cent rate at Sainsbury’s Finance versus  4.6% on bank loans at Clydesdale Bank.


Rounding up

Deciding how to finance your van is not a clear cut decision as there are many variables at play: your current financial situation; how good your credit rating is; whether you want to change vans regularly or not; how much you want to spend; etc. Just make sure before you sign on the dotted line that you know exactly what it is you are getting into, for how long and at what cost.


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