How much is the deposit on a new van? Your questions, answered
When looking to finance a new van, it's inevitable that you'll have a lot of questions. New vans on finance come with many options, so how do you know which is best for you?
Don't worry, we've looked at the questions you ask the most and put them together here - with answers - for your convenience.
From term length to balloon payments, here are the answers to your most frequently asked questions when you buy a van.
New van FAQs
"What is the difference between finance lease, contract hire and hire purchase?"
The finance options available to you are lease, hire or purchase. All agreements require a deposit. The only way to own your van is to choose a hire purchase agreement. After paying your deposit you pay a fixed amount for the duration of your agreement after which the van is yours to keep.
Contract Hire offers a convenient way of getting a van, with non-maintained or fully maintained deals available. A fully maintained deal covers warranty repairs, servicing and tyres. Again, the deposit is paid then you pay a monthly installment until the end of your term - at which point you just return the van.
If you want a flexible payment schedule, payments deducted to reduce taxable profits and the ability to renew your van every few years, then finance lease is for you. You pay a deposit, then monthly repayments for the duration of your agreement followed by a balloon payment at the end.
"What is a balloon payment?"
A balloon payment is effectively a final payment, required at the end of your lease agreement. A balloon payment is used to reduce the monthly cost and is equal to the predicted residual value (what the van is worth at the end of your term, calculated based on age and projected mileage) of the van. To cover the balloon payment you are legally required to sell the vehicle.
"What mileage restrictions are there?"
With a hire purchase agreement, there are no mileage restrictions. On contract hire, your monthly price is calculated based on your mileage requirements. Be careful not to understate your mileage as going over will result in additional charges. For finance lease agreements, projected mileage is used to calculate your balloon payment, so going over your specified mileage could result in you being out of pocket when it comes to selling your van.
"How much deposit is required?"
The deposit amount varies depending on the finance type. Hire purchase deals require a 20% deposit (equal to the VAT) and is reclaimable if you're VAT registered. Lease and contract hire deals usually require a deposit equal to six monthly payments in order to buy at our advertised prices. We do accept a lower deposit equal to three monthly payments however this will affect the monthly price.
"How long can I lease/hire a new van for?"
Our terms range from 2 to 5 years. Our pricing is normally based on two years for contract hire, four years for lease and five years for hire purchase.
"Do you accept part exchange?"
Unfortunately we are unable to accept vehicles in part exchange.
"Do you sell second hand vans?"
We don't. We are an online retailer that supplies new vans and cars only.
"What's the lead time on this van?"
If we have the van you've chosen in stock, it can be delivered in as little as five working days - our experts will advise you on this. If your van requires a factory order then lead time can vary. Again, our experts will keep you updated every step of the way.
"Can I pay cash?"
Yes, we do have a range of vehicles in stock that can be purchased outright and our prices are extremely competitive. Also - bear in mind that some of our vans do come out cheaper when purchased on a finance contract. You can discuss your requirements with our sales agents and they will be able to give you all of your options.
"Can I get finance if ?"
This question gets asked in many different ways, so we're going to address them all.
The first, is bad credit. All finance agreements are subject to a credit check, which you will need to pass to be approved. To help you work out your eligibility, finance companies will look for the following things: 3 year address history, one credit item in the past three years, UK residency, Full UK driving licence, proof of income and no current CCJ's or mortgage arrears. For business users, you'll also need proof of positive trading and a director that can sign as a guarantor.
Sole traders and new businesses frequently ask if their status makes them ineligible for finance. Being a sole trader or a new business doesn't mean you can't get finance. Finance companies will be looking for the things mentioned above and as long as you have them, there shouldn't be a problem.
Finally, another one is not being VAT registered. Again, this won't affect your eligibility - it just means you'll not realise the tax benefits that would come with being registered.
Check out our fantastic range of new vans on finance lease, contract hire and hire purchase. Call now 0845 021 0444 or enquire online.
