Finance Lease – Your Questions Answered
You dream of driving a new van.
Whatever your choice, or budget, you speak to the sales team, and then they hit you with the question…. “How will you be financing your new van?”
The most common method of van finance at Swiss is finance lease.
“What is finance lease?”
A finance agreement which is calculated on your estimated usage. You will have fixed monthly payments and a ‘balloon’ figure payable at the end. The balloon is agreed at the start of the agreement and is based on the estimated value at the end of the agreement.
“Is finance lease available to everyone?”
Yes and No. Sorry to confuse matters! It depends on the vehicle and also the finance company. Some will allow personal finance lease whereas other will only consider business users. Rest assured, whatever your situation, our Sales Team will advise you on the best method of finance available for you.
“Will I own the vehicle?”
No, the finance company will retain ownership of the vehicle. The vehicle is an asset of the leasing company, who then lease it to you. You still benefit from the equity in the vehicle at the end of the contact though. Confused? I’ll give you an example:
The balloon figure at the end of your agreement is £5000. The van is sold for £6000. The £1000 is equity, which is yours to keep, less 2% of the sale proceeds (£6000) payable to the leasing company. The total payable in this example would be £120.00.
Don’t forget, your deposit and monthly payments are tax allowable. In some cases, you can also claim back up to 100% of the VAT.
“How much deposit do I need to pay?”
This is a great advantage of finance lease, your deposit can be as low as £500. Bare in mind, the higher the deposit, the lower your monthly payments will be.
“What happens at the end of my lease agreement?”
Most commonly, our customers will trade in their van for a new one. We take your van in part exchange and arrange a new finance package on another brand new van for you.
You could also choose to sell the van privately and settle your balloon figure, plus 2% fee (see details above).
“Will my mileage be restricted?”
The simple answer is No. Your payments and balloon figure will be based on the mileage estimate you give us at the start of the agreement. There is no restriction on your mileage, but for this reason, it is important that you are as accurate as possible with your mileage estimate. A large increase in miles will affect the residual value of the van and you may find you have negative equity. (Your balloon figure is higher than the value of the van).
The balloon payment at the end of the Van Lease is based on a residual value of the vehicle determined by the finance company.
“Who will my finance be with?”
We use a variety of finance companies. This allows us to be very competitive with our prices. The sales team at Swiss will find you the best deal available.
“Do I need to go through a credit check?”
Yes, you will need to provide us with information to perform a credit check. All finance is subject to status.
“How quickly can I get my van?”
We aim to get the keys in your hand as quickly as possible. For stock vans, the turn around from order to delivery can be as little as 2 weeks. If you choose a factory order or a customised van such as a WASP, we ask that you allow a little extra time to allow the modifications to be completed.
The team at Swiss are always happy to answer your questions. Contact the team today on 01656 674 620