WHAT ARE THE ADVANTAGES OF HIRE PURCHASE?
There are many advantages to Hire Purchasing your next low loader van;
- Flexible initial deposit and payments
- Flexible payment terms (12 to 60 months)
- Fixed repayments
- Fixed interest rate
- No mileage restrictions
- Fixed payments are not subject to VAT because you pay it all upfront
WHAT ARE THE DISADVANTAGES OF HIRE PURCHASE?
- You will only own the vehicle after the final “Option To Purchase” fee is paid. Until then, the Luton van is the property of the funder.
- You are required to pay the “Option To Purchase” fee at the end of the agreement, there are no other options to choose.
- Monthly repayments tend to be higher than other finance options because you will be paying off the full value of the van.
WHY HIRE PURCHASE INSTEAD OF CONTRACT HIRE OR FINANCE LEASE?
Hire Purchase is the best option for businesses who are certain they want to work their way up to full ownership. It allows a company to drive away a van, that they may not have been able to purchase outright, and begin using it for their business needs whilst retaining the asset at the end of the agreement.
Unlike Contract Hire, Hire Purchase comes with no mileage restrictions so there is no need to estimate your usage accurately to avoid additional charges.
A business which buys a van under a Hire Purchase agreement is able to claim the depreciation on the asset as an expense, whereas with a Finance Lease the lessor claims the expense and benefits from the tax relief.
The van will also be included in your business as an asset from the day the agreement begins. Finally, as the debt is secured against the vehicle, this can mean that some businesses turned down for normal loans may be accepted with Hire Purchase.
HOW MUCH DOES HIRE PURCHASE COST COMPARED WITH BUYING THE VAN OUTRIGHT?
Hire Purchase, as with all finance deals, will work out more expensive than a cash purchase over the lifetime of an agreement. Hire Purchase does offer competitive fixed interest rates, especially if you have good credit. This, combined with the benefits of no large capital outlay associated with a cash purchase, can make HP an attractive option.
Hire Purchase also gives you flexible payment terms which support your business’ monthly budget.
DO I KEEP THE LUTON VAN AT THE END OF THE AGREEMENT?
Yes, with a Hire Purchase you are paying for ownership of the low loader van over the agreement length. Once you pay the option to purchase fee (usually £100-£200), you will have full ownership of the Luton van.
DO I HAVE TO BE VAT REGISTERED?
No, Hire Purchase is available to you whether you are VAT registered or not.
CAN I CLAIM VAT BACK ON MY MONTHLY PAYMENTS?
No, as your fixed repayments are not subject to VAT, you cannot claim back VAT on these payments. Your VAT is paid upfront as a deposit on your vehicle and can be claimed back in the normal way.
ARE THERE ANY MILEAGE LIMITATIONS?
No, there are no mileage restrictions associated with a Hire Purchase agreement. This is because the residual value does not need to be calculated as you will own the vehicle at the end of the agreement.
DO THE CO2 EMISSIONS ON MY LOW LOADER VAN AFFECT ANYTHING?
No. The vehicle is classified as a Commercial Vehicle; therefore, it falls into ‘Commercial’ classification for both Road Tax and Company/Personal Tax.
CAN I EXTEND MY HIRE PURCHASE AGREEMENT?
In some cases, you may be able to refinance and extend your Hire Purchase agreement. However, this is down to the funder and not something Maxi Mover can promise or arrange. This will usually involve paying a settlement fee on your agreement and begin a new contract with the same or another lender.
WHAT AGE DO I NEED TO BE TO TAKE OUT AN AGREEMENT?
Under the Consumer Credit Act, the minimum age to hire purchase a new vehicle is 18 years old. All finance companies will also require a copy of your driving license.
WHAT DEPOSIT DO I NEED TO PUT DOWN FOR THE LUTON VAN?
The minimum deposit you can put down for a Hire Purchase agreement would be the VAT (payable on the cost of the whole van) and RFL (road fund licence). If you want, you can put down a larger initial deposit to lower your monthly payments.
DO I HAVE TO GET A CREDIT CHECK FOR HIRE PURCHASE?
Yes, every Hire Purchase agreement and all finance lenders will require a credit check to be carried out. 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.
HOW LONG DOES A CREDIT CHECK TAKE?
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.
IF I GET TURNED DOWN, WILL THIS AFFECT MY CREDIT RATING?
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.
WHAT IF I HAVE A BAD CREDIT HISTORY?
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.
WHAT INFORMATION DO I NEED TO APPLY FOR FINANCE?
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
WILL I OWN THE LUTON VAN ON HIRE PURCHASE?
At the beginning and during the agreement, the van will be the property of the finance lender. At the end of the agreement, once you have paid off all outstanding debt on the van and have paid the option to purchase fee, you will own the Luton van.
WILL I BE RESPONSIBLE FOR PARKING AND SPEEDING FINES?
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.
WHO PAYS FOR MOT/SERVICING ON HIRE PURCHASE?
While you Hire Purchase your new Maxi Mover van, you are liable for maintaining and servicing the 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.
WHAT HAPPENS IF THE LUTON VAN IS IN AN ACCIDENT?
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.
CAN I CUSTOMISE THE LUTON VAN?
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.
CAN I TAKE MY VAN ABROAD DURING THE AGREEMENT?
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.
WILL MY INSURANCE PREMIUM GO UP WITH HIRE PURCHASE?
There isn’t any reason why your insurance premium should increase under a Hire Purchase agreement. Financing and Hire Purchasing of vans is becoming increasingly common; therefore, most insurance companies will provide highly competitive quotes, no different from what you’d expect on a van you’d bought with cash.
IS INSURANCE INCLUDED WITH A HIRE PURCHASE AGREEMENT?
No, you are liable for insuring the van for the length of the agreement on a fully comprehensive policy.
CAN I INSURE THE LUTON VAN UNDER COMPANY INSURANCE?
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.
IS FULLY COMPREHENSIVE INSURANCE REQUIRED?
Yes. Lenders will usually require you to take out a fully comprehensive policy for the entire term of the contract.
CAN I INSURE ANYONE TO DRIVE THE LUTON VAN?
The fact that you are Hire Purchasing your van will not affect your ability to add other drivers to your insurance.
CAN I INCLUDE INSURANCE IN THE HIRE PURCHASE PACKAGE?
No. We recommend you use a trusted price comparison website to ensure you get the most competitive quote.
IF I AM IN AN ACCIDENT, DO YOU PROVIDE A COURTESY VAN?
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.
IS THERE A DELIVERY CHARGE?
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.
WHAT ARE THE COLOUR OPTIONS?
We are able to offer a complete professional paint job to your exact specification for an additional cost.
IS ROAD TAX INCLUDED WITH HIRE PURCHASE?
You receive your first 12 months Road Tax with your new low loader van which will be payable in the Hire Purchase deposit. The each following year, the finance company will tax the van for you and charge the van tax back to you. Some lenders will charge an administration fee for this.
CAN I PUT PRIVATE PLATES ON A HIRE PURCHASE VAN?
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.
ARE THERE ANY HIDDEN COSTS?
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.
WHAT IS THE TIME SCALE FOR DELIVERY?
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.
DO YOU OFFER PART EXCHANGE ON ANY VEHICLE?
We offer part exchange on cars, vans, pick-up trucks and motorbikes. We are unable to take tractors, HGVs or plant and machinery.
DO YOU NEED TO SEE MY VEHICLE TO PART EXCHANGE?
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.
WILL YOU TAKE A VAN IN BAD CONDITION?
As a minimum, your part exchange will need to have a valid MOT and be legal to drive.