VanPeople.co.uk - contract hire and lease deals for vans and pick ups

Guide to Finance Options

Contract Hire

A very popular choice for VAT registered businesses as this is a VAT beneficial financing package, one regular payment covers all (including maintenance if required) for an agreed period and mileage.

Road fund licence is included and all you need to do is insure the vehicle and put in fuel. At the end of the term, you just hand back the vehicle or extend the hire, the choice is yours.

Finance Lease

Ideal for VAT registered businesses that want to handle the admin of their vehicles and have the asset shown on their balance sheet.

A VAT beneficial finance 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.

Lease Purchase/Hire Purchase

For non-VAT registered business or individuals that want eventual ownership of the vehicle.

A funding agreement where ownership is acquired when all the payments, including the option to purchase have been made. Part of the capital cost of the vehicle payment may be deferred into a “balloon” payment at the end of the agreement, the anticipated value of the vehicle.

If ownership is not important and the business is VAT registered, the best value for money is Contract Hire

Personal Contract Purchase

Personal Contract Purchase (PCP) is by far the most popular method of funding your vehicle when taking a “Cash for Car” option.

It is essentially a purchase agreement where the monthly payment is kept low by the implementation of a Guaranteed Future Value (GFV).

The GFV is stated at the outset of the contract and is determined by your annual mileage. At the end of the contract term, you have three options:

1) Hand back the vehicle to the finance company.

(An excess mileage charge may be incurred if you exceed the stated mileage).

2) Purchase the vehicle at the GFV value.
(Regardless of market value. We can arrange a re-financing package if required).

3) Part-exchange the vehicle.
(This is by far the most popular option as it allows you the possibility of taking equity from the difference between the part-exchange value and GFV figure of the vehicle. This amount can be used as a deposit on your next vehicle).

Full Maintenance can be included in this funding method.

Personal Contract Hire

Personal Contract Hire (PCH) gives the user a fixed equal monthly rental for a fixed contract term and mileage. At the end of the contract the vehicle is simply handed back.

Popular with company car drivers who are given a car or mileage allowance instead of company vehicle. It allows the individual to make his/her own choice and arrangements.

This will avoid benefit-in-kind taxation. The finance company assumes the risk of the residual value of the vehicle.

Please note - finance agreements generally incur a one-off documentation fee, due at the start of the contract. Please be assured that this is not a charge made by VanPeople.co.uk, and indeed is common in the field of vehicle financing.