Van Solutions

Finance Explained

What is van finance and how does it work?

Contract Hire

Contract Hire

Our van leasing offerings via Contract Hire are widely favoured by both VAT-registered and non-VAT-registered businesses. This is particularly true for companies seeking to reduce expenses while maintaining strong financial oversight and flexibility.

Achieving this balance is made feasible through a financial package that provides VAT benefits. Through a single monthly rental payment, the funder assumes all risks, including depreciation and disposal costs, for an agreed-upon duration and mileage.

Additionally, our comprehensive package, inclusive of Road Fund License, allows for optional add-ons such as roadside rescue, maintenance, and relief vehicle provision.

Advantages of opting for Contract Hire include:

  • Tax deductibility of up to 100%, dependent on the vehicle cost
  • Minimal initial expenditure
  • Flexible contract options
  • Absence of residual risk
  • End of contract disposal taken care of
  • Choice for a relief vehicle during downtime
  • Capital not invested in a depreciating asset
  • Fixed costs with the option for maintenance
  • Reclaimable VAT on rentals
  • Inclusion of road fund license throughout the entire contract duration
Van Finance Lease

Van Finance Lease

This kind of van lease is ideal for both VAT–registered and non-VAT registered companies who want to handle the administration of their vehicles, and have the asset shown on their balance sheet.

A VAT – beneficial option where the hirer can choose to pay the entire cost over the agreed lease period, plus an interest charge, or pay lower monthly rentals during the lease period with a final payment based on the anticipated resale value of the vehicle.

Advantages of opting for Van Finance Lease include:

  • Business capital not tied up in a depreciating asset
  • VAT on rentals reclaimable
  • 100% tax deductible. Reduce your costs and get back from the government up to 40% of all payments (including your deposit)
  • Spread the VAT across all your payments, (purchase agreements – all VAT is paid up front at the start of the agreement)
  • All VAT payments claimed back if registered, if not registered offset it against your tax
  • Fixed payments for the whole agreement
  • Low deposits and low monthly payments
  • Flexibility – can settle early like a standard loan
  • Lower payments – can offset some capital to the end of the van lease (called final rental or residual payment)
  • No penalty charges for additional mileage or damage etc at the end of the agreement
Hire Purchase

Hire Purchase

Ideal for VAT-registered companies that want eventual ownership of the vehicle. A funding agreement where the company acquires ownership when all payments, including the purchase payment have been made.

Part of the capital cost of the vehicle payment may be deferred into a Residual or Final Rental Payment at the end of the agreement, which equates to the anticipated market value of the vehicle at the end of the agreed leasing period.

This is a much more traditional van leasing option, favoured by those looking for eventual ownership of their lease vans.

Advantages of opting for Hire Purchase include:

  • Fixed monthly cost
  • Ownership at the end of the lease
  • Flexible contract
  • Balloon Payment option
  • Low initial outlay
  • Business capital not tied up in a depreciating asset
  • Finance not subject to VAT
  • Interest reclaimable against tax
  • Writing down allowance
  • Road fund licence included for the first year of the contract