Why should you consider Contract Hire for your new van?
Contract hire represents a convenient way to get a new van on a budget.
As you may have experienced, choosing and buying a new van can be a confusing and sometimes stressful procedure. In reality, it should be exciting – buying a new asset for your business makes evident that you’re heading in the right direction, and is more often than not due to financial security and business growth. Nevertheless, there are numerous different finance options available, all of which can be very confusing. But don’t panic, Cars and Vans Direct Finance are here to explain one of the most popular choices in the world of commercial vehicle financing options – Contract Hire.
Contract hire is similar to finance lease in the fact that you are effectively renting a van for a fixed monthly cost over an agreed period of time (ranging from 2-5 years). However, contrary to finance lease you don’t have to sell the van and pay a balloon payment at the end of term. Instead you simply hand the van back to the finance company with the option of renewing your contract and getting a new van under a similar agreement.
Beneficial Aspects of Contract Hire
As mentioned above, there is no balloon payment at the end of the agreement. You can just walk away and source another vehicle without any worries, or alternatively get another new contract for another brand new van with the same company.
Having new vehicles every 2-5 years will be good for the business in terms of brand image and reliability. Having the latest vans presents an image of success and professionalism. In addition to this you are likely to be spending a lot less money on maintenance and repairs, and won’t have the inconvenience of being without your van.
The monthly payments are low in comparison with other finance options which is of course beneficial for any business who wants to keep outgoing low. In addition to this the initial deposit can be as low as £500 (or equivalent to 3 monthly payments) which is substantially lower in comparison to Hire Purchase for example. Not having to pay a significant lump-sum at any given time is ideal for businesses with low expendable capital, and one of the main advantages of the contract hire package.
Points to Consider when thinking of Contract Hire
There is an option to add a maintenance package to your contract hire agreement. This will cover servicing, brakes and tyres for an extra fee distributed into your monthly payments. If you are looking into a 5 year term with a high mileage projection then this addition certainly has the potential to save you money.
Most Contract Hire packages advertised on cars and Vans Finance Direct breakdown cover and UK deliveries are inclusive in the price, so there is no need to arrange these things yourself.
Looking for a new van on Contract Hire? Car and Van Finance Direct are here to help you find the perfect van and finance deal for you. Call us on 02920 789234 today!