There are many business operations that require the use of a van and this vehicle will have a big impact on the daily running of the business. A business van can also be a major cost to cover, so it is important to find the right finance option for your needs. Here are a few of the main options to consider along with their pros and cons so that you can arrive at the right decision.
Van Hire Purchase
A van hire purchase (HP) finance deal will involve paying a deposit and then monthly fixed payments to pay off the value of the vehicle. The agreement is usually between 1 and 5 years and you will then own the vehicle once the final payment has been made. The deposit is generally quite low and repayment terms are flexible, but costs can be higher than other options and you will not technically own the car until after the last payment has been made.
Van Personal Contract Perhaps
A van
personal contract purchase (PCP) deal differs in that you have a few options at the end of the agreement. You can return the keys and end the agreement if you wish, buy the car by making a balloon payment or part-exchange the vehicle and take out a new agreement. This can be a good option as you could drive a newer van every few years and many will enjoy the flexibility, but there are usually annual mileage limits in place.
Business Loan
Another option is to
take out a business loan to cover the costs of the van for your business. There are both secured and unsecured loan options available, and you do not have to worry about mileage limits or customization as you will already own the vehicle and be paying a third party for the loan. It can be easy to apply and there is often flexibility, but just make sure that you will be able to afford repayments particularly if it is a secured loan.
Van Personal Contract Hire
You could also arrange a
van personal contract hire (PCH) deal. These are agreements that are typically between 2 and 5 years and you often have higher monthly payments than PCP, but it will often work out to be cheaper over the entire contract. Unlike PCP, there is no option to buy after the contract, but this does mean that you can take out a lease on a newer van.
These are your main options if you are looking to finance a van for your business. It is important that you weigh up your options and determine what the best option is for your specific circumstances and always shop around so that you can get the best finance deal for your new vehicle.
