Can You Convert a Van on Finance?

One of the joys of owning a van is having the freedom to transform it into whatever you like, whether it be an on-the-go office or a cosy campervan.

If you have purchased your van on finance, you might be wondering where you stand with travelling in it. Finance is still relatively new to a lot of people so you are right to ask questions to find out what you can and can’t do with it.

Keep reading to find out everything you need to know about converting your van on finance.

Why should you buy a van on finance?

Buying a van is a significant investment, whether for a business or individual use. It is important to be aware of the different options available so that you find a solution that is best for you.

While leasing is a popular option that allows you to pay monthly instalments for your vehicle of choice, finance is offered on new and used vehicles. This means that finance is a cheaper solution and provides you with a wider range of options on vehicles.

There are a huge number of benefits to choosing vehicle finance, as opposed to buying outright.

Financing has become one of the most popular ways to drive the latest van. Here are just a few of the benefits of financing a vehicle:

Low monthly payments

One of the biggest benefits of financing a vehicle is that you get to enjoy the luxury of the latest van while paying small, affordable monthly payments.

This means that you only pay for a portion of your van upfront while the rest is spread out over the length of the specified agreement. You can often choose the length of the contract, the deposit amount and the annual mileage limit of your vehicle.

The payments are often lower and more manageable, allowing you to put more money into other areas of your life.

Warranty and servicing

Further benefits of buying via hire purchase, contract hire, or lease purchase relate to the servicing and warranty of the van in which you’re investing.

Maintenance costs can cause a headache for all motorists, but those operating a commercial vehicle face an even greater need for ensuring performance.

Many financial agreements provide the option of taking out servicing packages to cover any potential repairs and breakdown costs. These packages represent an affordable way to preserve the well-being of your vehicle and protect you from incurring expensive costs for repair work and replacement parts.

Dealer reassurance

In addition to the affordability of buying a van on finance, you have the reassurance that comes from knowing you’re purchasing from a reputable dealer.

At Van Sales UK, we offer a range of van finance options to make sure you are getting the deal that’s best for you.

What are the different types of finance options?

There are many different types of finance options available, and it can sometimes be confusing trying to work out which is best for you.

Below are some of the options available to give you a better understanding of how to get the best deal possible for you.

Contract hire

Contract hire is a form of finance that funds the use of the vehicle for a set period of time but not the purchase of it.

It allows a customer (known as the lessee) to choose the vehicle they want, use it for a set period of time and an anticipated mileage and then give it back to the leasing company (known as the lessor) at the end of the period of hire. The risks and rewards are therefore with the lessor under contract hire agreements, so it is a simple and risk-free option.

With contract hire, you don’t get the overall ownership (or the cost of the overall ownership).

The advantages of contract hire

Here are some of the advantages of contract hire:

• Small initial cost

• No residual risk

• Eliminates the stress and financial risks of vehicle ownership

The disadvantages of contract hire

Here are some disadvantages of contract hire:

• No ability to profit from residual values

• There is no option for the company to purchase the vehicle

• If you do more miles than stated in your contract you will be charged excess mileage for each mile over that stated in your contract

Finance lease

Finance lease is an option which enables you to lease a vehicle but also benefit from its sale.

Finance lease is a VAT-beneficial option. You can pay the entire van cost over the agreed lease period, plus interest charges. Alternatively, you can pay lower monthly rentals during the lease period with the additional of a final balloon payment. The balloon payment is based on your expected resale value of the van.

This is a flexible option with no mileage limits or damage recharges.

The advantages of finance lease

There are lots of advantages of finance lease:

• Opportunity to benefit from the vehicle sale – when the vehicle is sold at the end of the agreement, any surplus funds are split between the lesser and the lessee

• Tax deductible – If you are leasing as a business customer, there are several tax benefits which you can take advantage of

• Flexibility to extend your agreement – If you get to the end of the agreement and don’t want to part with your vehicle, you are able to extend with a secondary rental period

The disadvantages of finance lease

Here are some disadvantages of finance lease:

• The finance company are the legal owners of the asset, and you will not own it

• The asset is not protected if you or your company are made bankrupt

Hire purchase

If you need to buy a van either for yourself or your business, but you don’t have the immediate funds to hand, then it is worth considering hire purchase.

Usually, the full cost of the vehicle will be financed. However, part of the cost can be deferred to a balloon payment. Bear in mind, this option is only available to business users. In this case, you will have lower monthly payments with a final payment. Then, the balloon payment is agreed based on the expected resale value of the van.

This a great option for both private individuals and businesses as it offers a monthly payment with a transfer of ownership to you once the term ends and all the funds have been repaid.

The advantages of hire purchase

• You can access newer, higher specification cars – with a hire purchase agreement, it becomes possible to afford a higher specification car and use it right away

• You can spread the cost over a fixed term

• The interest rate is fixed

The disadvantages of hire purchase

• Hire purchase contracts are usually fixed, therefore if you find yourself in financial difficulty during that period, you may lose the asset and damage your credit rating.

• You’ll pay more for whatever it is you’re financing through hire purchase.

• You won’t own the asset until you have made the final hire purchase payment. Therefore the vendor has the right to seize it should you fall foul of their terms.

Which finance option allows you to convert your van?

One of the most important things to be aware of when choosing a finance option is which one allows you to convert your vehicle.

If you are looking to convert your vehicle after financing it, the best choice of finance is hire purchase, whereby you can own the vehicle at the end, This means that as you own the van at the end of the agreement, you can do what you please to it.

Van Sales UK: Exceptional van deals

If you are looking to buy a van with affordable finance rates, then look no further than Van Sales UK.

At Van Sales UK, we are the home of low-cost vans. We offer van sales in Bristol to a wide range of customers. Whether you’re looking to buy a van on finance or outright, we have something for you.

We are proud to offer the best new and used van deals on the latest models at affordable prices including Transit custom deals and so much more.

If you are looking to learn more about buying a van on finance, then please don’t hesitate to get in touch with a member of our friendly team here today. We are always on hand to answer any questions or queries you may have and point you in the right direction.