Van Finance FAQs

A balloon payment is a final payment, required at the end of certain finance agreements. Balloon payments are often used to lower the monthly payment amount during the loan term. This payment is equivalent to the predicted residual value of the van. It is calculated based on factors such as the van's age and projected mileage.

With a Van Hire Purchase agreement, there are no mileage restrictions. With Contract Hire, your monthly price is determined by your annual mileage requirements. Be careful not to understate your mileage, as exceeding it will result in additional charges. In Van Leasing 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, as a higher mileage could mean it is worth less than predicted.

Van Hire Purchase agreements usually require a 20% deposit (equal to the VAT). This is reclaimable if your business is VAT registered.

Van Lease and Contract Hire agreements usually require an initial rental that is equal to three, six, nine or twelve monthly rentals. As a general rule, the higher your initial rental, the lower your monthly rentals will be.