December 05, 2016

Van Leasing – Vanman’s guide


Van leasing is an increasingly popular way to get a new van on finance, there are many options available, but van leasing tends to be your cheapest option. So what exactly is van leasing? And is it the best way for you to finance your new van?

Van leasing – How does it work?

Van leasing is a highly flexible way of financing your new van. If owning the new van at the end of your agreement isn’t a priority, then van leasing may be for you. Van leasing terms range between 24 and 60 months and at the end of the period you sell the van on to a third party. Sound confusing? Let’s explain the whole process. Firstly you pay an initial payment (a minimum of £500 or 3 monthly rentals, however this can be more to decrease monthly payments), followed by monthly payments over the period that you have agreed, then you pay a final one-off ‘balloon payment’ which is covered by you selling the van to a third party. You are legally required to sell the van. The ‘Balloon payment’ is calculated prior to the contract using a projected mileage figure and taking into account natural depreciation of the van.

If you sell the van for  a higher figure than the balloon payment, then you keep 97.5% of the profit from selling the van on.

 

Van leasing benefits

Van leasing has a wide range of benefits, not just to mention it being the cheapest option to finance a new van. As mentioned in the previous section, it is feasible that you could make a profit in selling your van on to a third party and you get to keep 97.5% of the profits, with the finance company taking a small 2.5% to cover admin costs. Van leasing is also an attractive option because the monthly rentals can be offset against your yearly tax bill and VAT can be offset against your quarterly returns.

With van leasing, you will also find that there aren’t any overly strict restrictions on mileage, which makes it a highly flexible and popular choice, you only need to provide a projected mileage figure at the beginning of the contract to calculate the final balloon payment. So theoretically if you cover less mileage than your protected figure, then your van should be worth more and you may make a profit on it. Also bare this in mind if exceeding the projected mileage and any wear on tear on the van may effect its value at the end of the term and consequently affect its resale value.

Benefits do not end there, all van leasing deals from Vanman come with a full manufacturer’s warranty and first year’s road fund licence and roadside assistance! You won’t be hit with a substantial delivery charge either, all Vanman deals come with free UK wide delivery!

 

Early repayment of your van lease

You can also look to pay off your van leasing agreement earlier than expected. Contact Vanman or your finance company to get advice on paying a settlement figure and how much it will cost you.

 

Are you eligible?

If you’re looking for a new van leasing agreement from Vanman, finance companies will examine whether you meet certain criteria. You’ll be required to show evidence of factors including: 3 years address history, UK residency, full UK driving license and one item successfully completed on credit in the previous three years. When applying for a new van on finance from Vanman, the finance company will conduct a full credit check.