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March 26th, 2021
So, you’ve had your lease van for a while now. You may have opted for a long-term van lease of 5 years, and now you’re wondering what to do when your lease is up.
It’s important that you understand all of the options available to you at the end of your lease, so you to make a decision that benefits you and your business.
Depending on the finance option you chose when you were looking into leasing deals, you will have different options when your lease comes to an end.
If you had opted for Hire Purchase vans, at the end of your lease you will have full ownership. This means you are free to sell on (and receive 100% of the profits) or retain use of the vehicle/vehicles for as long as you wish. Full ownership also means that you are responsible for the disposal of the vehicles when they are no longer in use.
You may have decided on a different type of business van lease, for example Contract Hire. When you reach the end of Contract Hire leasing deals the vehicle is returned to the Funder, who will have retained ownership of the vehicle throughout your term of possession. It is important that throughout your lease you are aware that there can be expensive excess mileage and damage charges applied when the vehicle is returned. This is due to depreciation- if you have exceeded your mileage and there is excess damage to your vehicle, it may my worth less than expected when it is returned to the funder.
The last finance option for long term van lease is Finance Lease; when it comes to your options at the end of the term, these are the most flexible leasing deals. Here you can decide to opt for ownership, to sell the van (and receive 97.5% of the proceeds), extend the lease, or trade in and take out a new business van lease on a newer model.
Ownership: If you want to keep the vehicle and avoid the secondary rental period – you will first need to end the lease. To do this, you’ll need to sell the vehicle to an unrelated third party and send a small percentage of the invoice value (usually between 2% and 5%) and the invoice to your finance company. In order to keep the vehicle, the third party can simply invoice you back for the vehicle.
Trade in: If you would like to trade in your van and take out a new business van lease, you can part-exchange the vehicle with us for a new model. You will be able to benefit for any equity in the vehicle, which you can put towards the deposit on your new vehicle. This is a great option if want to benefit from new van leasing deals and want to ensure your business vehicles are always up to date.
Sell the vehicle: At the end of your business van lease, you have the option to sell your vehicle on. You can advertise the vehicle privately and sell on behalf of the leasing company. You’ll need to settle the Final Rental and send the leasing company a small percentage of the sales invoice value (usually between 2% and 5%).
Refinance: The last option if you have opted for Finance Lease would be to refinance the Final Rental. To extend the lease, we would provide you with a quotation to refinance the Final Rental over a further agreed leasing period (subject to credit approval).
If you are still unsure of your end of lease options, or want to hear about our latest leasing deals, Contact Us or call 0117 692 5314 to speak to one of our van specialists.
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