Get an instant quote

To prioritise your enquiry our sales team is ready to take your call. Call us on 0117 962 5314 between 9am to 6:30pm Monday to Friday and Saturday 9:30am to 1:30pm. Learn More

Finance Lease Explained

September 5th, 2016

You hear the term quite often, but what is Finance Lease? How does it compare to other financing options?

Finance Lease is a tax-efficient funding solution. It’s similar to HP (Hire Purchase), but it allows you to get higher van discounts.

There are a few distinct advantages for Finance Lease…

  • 100% Tax efficient
  • Lowest initial cost
  • Low monthly payments (can be reduced by having a residual payment)
  • VAT is spread over each payment
  • Flexibility with ability to early settle and no damage or mileage penalties

Why is it tax efficient?

All payments are tax deductible against revenue—which can save you up to 40% off the cost of your vehicle.

Why are the initial costs so low?

Rather than paying 10% deposit plus full VAT (20%), you’ll only have to pay 3 payments down. You’ll only have to pay the VAT on that payment.

Why are the payments so low?

There are a few reasons for this.

  • Leasing discounts are higher—giving you a better deal
  • By having a residual, you are not paying the full cost of the vehicle over the period

How does it differ from Hire Purchase?

  • The VAT treatment which is spread rather than all upfront
  • The ownership lies with the funder—thus giving you the tax efficiency of a rental

What happens at the end?

  • You can sell the vehicle as an agent (you receive 97% of net proceeds less any loan outstanding)
  • You can keep vehicle on secondary rental (annual payment equal to normal monthly payment

How do I apply?

Similar to any finance you / the business is credit checked once you have requested us to proceed.

Still have questions about Finance Lease? Contact one of our van specialists

Latest Posts

Welcome Back!

After 18 long months it’s great to finally welcome the whole of our Global Vans team back to their desks! We are so […]

Read More