Everything You Need To Know About Leasing Your Next Low Floor Luton Van. Explained As Simply As Possible.


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.

There are plenty of positives that come from Finance Leasing a Luton van for your business, such as;

  • Greatly improved cash flow compared to buying outright and finance options which require a large deposit
  • Fixed and low monthly payments
  • Low, variable deposit
  • The possibility of claiming tax relief depending on business usage (50% on cars and 100% on LCVs)
  • No mileage restrictions
  • You will build up equity in your Maxi Mover van

There are only a few drawbacks to pursuing the Finance Lease option;

  • Your monthly payments will appear as a liability on your finances
  • Changing rates of used vehicles can affect your selling price at the end of the agreement, which may result in you have negative equity and owing the lender

Finance Leasing gives you choices at the end of the agreement which you simply don’t get with other finance options. It’s especially valuable if you can’t accurately anticipate the number of miles you’ll be doing in your new low loader.

It’s a great alternative if you plan to use the van for a job that might have a detrimental affect on it’s condition at the end of the contract. For example, if you’re picking up trade goods all day and taking the van onto building sites, Finance Lease is a good option for this.

Contract Hire, comparatively, is quite restrictive. With this option, you only really have a single choice at the end of the agreement which is just to return the vehicle. As mileage is restricted on Contract Hire, you could be due a large excess mileage fee and a repair bill if the van isn’t up to BVRLA (British Vehicle Rental & Leasing Association) standards.

Finance Leasing simply gives you more choices as shown here. It allows you to have a more flexible finance agreement and you can choose to leave the agreement/request early settlement at any time in the agreement. Maxi Mover would suggest not settling too early in the contract because the depreciation curve is much more significant in the beginning of the contract. If you leave the contract too early, the amount owed could be more than the van resulting in negative equity.

Comparatively, in a Contract Hire agreement you can be penalised for leaving the contract early with heavy fees.

At the end of your agreement you will get three choices:

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.

Finance Leasing is an option for your business even if you are not VAT registered. In reality, if you’re not registered for VAT then Finance Leasing would be preferable to buying outright. This is because the VAT would be spread over the monthly repayments instead of having to pay upfront. This keeps your deposit as low as possible and use the cash saved in other areas of your business.

If your company is VAT registered, then you can claim back all of the VAT. The VAT payments are made monthly and can be claimed back in each quarter for your VAT return. If you business becomes VAT registered while the contract is running, you can start claiming back VAT from that time onwards.

No, there are technically no mileage restrictions with Finance Lease.

However, the final residual value of the low floor van is determined based on the agreement length and mileage stated. Therefore, although these is no hard mileage restriction, if you do a lot more mileage than you stated, this can result in negative equity at the end of the agreement. Because of this, it’s highly recommended that you try and estimate your mileage as accurately as possible.

No. The vehicle is classified as a Commercial Vehicle; therefore, it falls into ‘Commercial’ classification for both Road Tax and Company/Personal Tax.

No, you can’t so it is imperative that you get your quote based on your realistic mileage during the agreement. This will have a large impact on the final balloon payment. There are no extra charges linked to excess mileage on a Finance Lease.

Usually, this is not a problem but it depends on the funder in question. If you reach out to your funder, they will be able to explain all of your available options to you.

At the end of the term, one of the choices you have is to do a “Peppercorn agreement” which is ordinarily one monthly payment to use the van for another 12 months.

You must be 18 years old at a minimum due to the Consumer Credit Act. All funders will also need a copy of your driving licence.

A main benefit of Finance Leasing is the ability to put down a low deposit. This variable deposit (as well as the final balloon payment) will have an impact on your monthly payments.

Yes, every Hire Purchase agreement and all finance lenders will conduct a credit check. However, all lenders have differing criteria and requirements, so Maxi Mover will endeavour to find the right funder for your business and your current circumstances.

As we use many different leading funders, the time taken for a credit check can differ between them. This can vary between as little as 10 minutes to 72 hours. It can also depend on the circumstance of the application.

Credit checks for any finance will leave a digital footprint on your credit. However, this footprint does not record the outcome of the credit check. Usually, your credit will only take a hit if there are many repeated checks over a short period of time.

This completely depends on your credit history and how bad it is. Maxi Mover use a range of finance lenders who will do their best to get your application accepted. The actual acceptance of an application is down to the descretion of the lender. Some lenders will be more understanding towards your finance/credit situation than others.

Before being accepted for finance by the funder, all of our clients must be evaluated for credit. Although lenders will have different requirements, some typical instances of the kinds of data would be:

  • Your full name, address and home phone number
  • Company registration number (if limited) and your company name
  • The past 5 years of your address history
  • How long your business has been operating
  • Director details
  • Bank details

No, when you finance a low loader Luton van through a Finance Lease agreement, you do not own it. However, whatever value is left in the van at the end is yours once fees have been paid.

For example, you have a balloon payment of £5000 at the end of the contract and your van sells for £6500. The £1500 above the balloon payment is yours to keep minus the lenders cut (usually around 2.5%-5%). The percentage charge is a fee to do the invoice and paperwork.

You do not have the option to buy the van at the end of the contract. If there’s a final rental that must be paid, you can either pay the whole sum or the funder will allow you to refinance it.

If you want to keep the van after the the agreement is up, you can pay a nominal fee (usually one months rental) and enter a peppercorn agreement which allows you to keep the van for another 12 months. However, not all finance companies may offer this option.

When you reach the end of your agreement on a Finance Lease, you have the majority rights to the final resale value of the Luton van. You are also able to offset 100% of your monthly rentals against your taxable profits.

If you want to continue to use the vehicle you can pay a nominal fee (usually one month’s rental) and carry on driving for the whole of the following year. This option keeps the van off your finance balance sheets and gives you full use of the van, while still being able to offset your payments against taxable profits.

Yes, you are responsible for all parking tickets and penalties. All fines for parking are given directly to you rather than to the funder, so you should deal with them as quickly as possible to avoid extra fees.

However, all speeding fines will be sent to the finance company as they are the registered keeper until the end of the agreement. They will pay the fine and pass the details on to you. Please be aware, they will usually charge an administration fee for paying the fine.

You are the one liable for maintaining and servicing the low floor Luton van in accordance with the manufacturer’s guidelines. Most manufacturers now offer a standard 3-year warranty for peace of mind to cover all malfunctions on the components of the manufacturer.

In the unfortunate case of an accident, you will need to call your insurance company because they will need full information of your accident. Naturally, Maxi Mover will do our best to provide any assistance in talks finance lender and are pleased to assist wherever possible.

It is important to note that you have a right to choose where and how your Maxi Mover van is repaired. Your insurance company may try and convince you to have you van repaired at their bodyshop, but this is unlikely to meet the rigourous standards of service and quality we offer at Maxi Mover.

Yes, you can customise the van as you are working up to full ownership under a Hire Purchase agreement.

However, if you are unable to keep up with payments and the van is repossessed, the customisations may end up lowering the value of the van. In case of this, we would recommend you don’t add any customisations that will reduce the value of the van until your agreement is finished.

Yes you may. You should notify the lender so you can get a copy of your Luton van’s registration documents to avoid any problems when you travel overseas.

You should also make sure your insurance covers you for overseas travel with your low loader van.

There isn’t any reason why your insurance premium should increase under a Finance Lease agreement. Financing of vans is becoming increasingly common; therefore, most insurance companies will provide highly competitive quotes, no different from what you’d expect on a low floor van you’d bought with cash.

No, you are liable for insuring the Luton van for the length of the agreement on a fully comprehensive policy.

Yes, definitely. However, insurance must be in the applicant’s name, whether it is your name, the name of the trading business or your business.

Yes. Lenders will usually require you to take out a fully comprehensive policy for the entire term of the contract.

The fact that you are Finance Leasing your Luton van will not affect your ability to add other drivers to your insurance.

No. We recommend you use a trusted price comparison website to ensure you get the most competitive quote.

This is something that your insurance company will ordinarily cover. You may be charged an extra fee for the option. It is worth checking with your insurer to see whether this is something they can provide and what the terms are for the courtesy van.

We prefer to carry out a comprehensive handover at our factory, however, if you would like your new Maxi Mover delivering to your chosen address, we will be able to arrange this for you at a nominal cost.

We are able to offer a complete professional paint job to your exact specification for an additional cost.

You receive your first 12 months Road Tax with your new low loader van. On a van Finance Lease, the finance company tax the vehicle every year thereafter for you and recharge the cost of the road fund licence back to you. Please note that some finance companies will charge an admin fee for this service.

Yes. However, some lenders will require a take an administration fee to add private plates. This isn’t unusual and is normally taken at the start of the contract along with the deposit.

Maxi Mover do not have have any hidden costs. You will be given a fully itemised quotation for your new van. The only potential hidden costs are added by the finance company for services like private plates, road fund license/tax, or various administration charges.

This really depends on the Luton van you choose. As most of our customers tend to opt for our special offer stock vehicles, we can usually deliver your new van within a few weeks. If you decide to go for a factory ordered or bespoke vehicle, these can take longer, typically around 8 weeks or more in some cases.

We offer part exchange on cars, vans, pick-up trucks and motorbikes. We are unable to take tractors, HGVs or plant and machinery.

Not initially. We will ask you to assess the vehicle’s condition so that we can give you a valuation. Obviously payment of this amount will be dependent on the van being ‘as described’ when we receive it.

As a minimum, your part exchange will need to have a valid MOT and be legal to drive.

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