With a Finance Lease, you hire a van for a fixed monthly rental payment. You have the flexibility to make this monthly figure work for your business through variable deposit options and an final payment (also known as a balloon payment). At the end of the agreement, you are liable for disposing of the van through three options;
Option 1 – Sell the van
You will get your balance of the sale, minus anything owed to the finance company and a 2%-5% fee (depending on the finance company).
Option 2 – Return Your Vehicle
You can sell the vehicle on the lenders behalf and get a share of the sale once everything owed to the finance company is paid.
Option 3 – Keep Your Vehicle
You can continue on what’s known as a “Peppercorn agreement” whereby you pay a months rental (usually, this depends on the lender) and you can keep driving the vehicle for another 12 months.