What is Business Contract Purchase?
Contract purchase or business contract purchase is a fantastic option for people who want to purchase a vehicle but want to pay for it in a much more manageable way. The payments are made via monthly installments which are not subject to VAT. There are also optional service packages (i.e the maintenance) on which VAT must be paid, however that is optional.Advantages of contract purchase
- Payments for the van are made by fixed monthly payments
- The initial deposit is very low and affordable
- The van you will receive will be brand new and will be more fuel-efficient than an older one
- You can refinance the balloon payment
- There is no need to worry about depreciation if you do decide not to renew your contract at the end of the agreement
- The low initial payments mean you can have access to a vehicle that you may not have been previously been able to afford
- Upon the beginning of the contract, the finance company agrees a fixed resale with you
- Once the contract expires, you can simply return the van if you wish
- It is more cost-effective motoring
About contract purchase
Contract purchase gives you much more freedom once the finance agreement comes to an end. Van leasing allows people to drive vans which they may not have been able to afford previously, due to the cost effectiveness of the plan - with its low monthly payments and initial deposit. When the contract comes to an end, you have a few options. You can either make the balloon payment so that the van is yours, refinance the agreement so that you can continue with that van, or hand the vehicle back and walk away with no more obligation whatsoever.
When the contract is agreed, customers make their initial payment and then pay the fixed monthly payments which are put into place. Then, at the end of the contract you have the option of paying a balloon amount (which is sometimes even referred to as â€œgenerated future valeâ€ or GFV for short).
There are four basic options for when your contract ends, they are
- Give the vehicle back to the funder, provided it is in suitable condition for its age
- Make the balloon payment and keep the vehicle
- Trade the van at a dealership in part-exchange for another vehicle
- Sell the van privately if you feel it is worth more than the GFK - you can even keep any profit
Contract purchase or personal contract purchase is a fantastic option for people who wish to purchase vehicle or van but pay for it in a much more manageable manner. Get in contact with us here at LeaseVan today to find about our van contract purchase options, you can call us immediately on 0344 745 1818 to speak to one of our friendly members of staff.
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