What’s Your Pick from The Vehicle Finance Menu?
Vehicle Finance is no longer an alternative for purchasing vehicles! In fact, 80% of all new cars purchased, are done so through bespoke finance arrangements!
What is Vehicle Finance?
There are many forms of Vehicle Finance-which we have listed for you below!
Essentially, Vehicle Finance is a way for businesses or private individuals to obtain a vehicle or fleet of vehicles. Vehicle Finance is often preferable than a cash purchase as it reduces large upfront costs-protecting your cashflow! Due to low rates, it’s easier and more affordable than ever to borrow a sum of money!
At Chatsbrook, our clients are at the heart of everything that we do. We pride ourselves on finding the most competitive deal on the marketplace for our clients, even if it means that we don’t earn a lot of money from it! If you would like a fully transparent service, contact 01603 733500 for the best Vehicle Finance.
So, without further ado…
There are a multitude of finance options you can select on your route to finance. Sometimes it is hard to know which one would work best for your business. So, to make it easier for you, Chatsbrook have summed up each finance plan.
Hire Purchase
The customer (hirer) agree to hire an asset from a finance provider, who agrees to purchase and provide the asset to the business if the business meets all of the criteria. The hirer is then accountable for the insurance and maintenance of the equipment and make regular payments to the provider. At the end of the agreed term-time the hirer has the option to take ownership of the asset.
Lease Purchase
This agreement is very similar to Hire Purchase but offers more flexibility to the hirer. Lease Purchases enable you to defer a proportion of your payments-this is known as the final balloon payment. Clients that choose to defer a larger proportion of the payment consequently have lower monthly payments.
Finance Lease
This is a contract between the hirer and the lender, whereby the hirer agrees to lease the asset for a particular amount of time whilst maintaining regular payments. Throughout the lease, the hirer is wholly responsible for the maintenance of the equipment. At the end of the leasing period, the provider sells the asset and typically receives only 5% of what it sells for. On average, 95% of the money generated from the sale is returned to the hirer that leased the asset.
Contract Hire
A Contract Hire agreement is great for clients that wish to have a vehicle, such as a car or van where usage rather than ownership is required. There are many benefits to this type of agreement. For instance, you do not have the burden of having to source the vehicle from the supplier, there is no risk of depreciation or disposal and there is also an option to include the running costs of assets. There are however mileage limits.
Refinance
Businesses can agree to sell one or more of their assets to the finance provider, releasing a sum of money- this is good for businesses that are asset rich and wish to release cash flow. The business retains full use of their asset as they lease it from the finance provider by providing regular payments. Refinance is also good for businesses with poor credit history as the finance arrangement is based on the value of the asset and not the businesses credit history. This means that businesses that have been turned down by lending institutions in the past for loans could have the opportunity to access funds.
To make it easy to understand, Chatsbrook have created a table to showcase the terms and features of each type of agreement. Click HERE to see.
If you think that any of these finance options could benefit your business, please do not hesitate to get in touch with our friendly team!
