17/05/2024
Believe it or not, I still get a surprising amount of customers (new start Sole Traders as well as established Limited Company Directors) that aren't sure which way to go when purchasing a new van, truck or any LCV.
Let's do a Rapid Breakdown of the options to make things easier.
🟡 Hire Purchase 🟡
▪️ Whole VAT amount usually needs paying up front as a minimum (great if you're VAT registered as you claim back that entire VAT amount in your next quarter)
▪️ Payments are spread equally across the term length, then you own it at the end.
▪️ No VAT to add onto any monthlies as you've paid it all up front.
▪️ Despite it being on finance you can offset 100% of the vehicles cost against your tax bill in year 1! (fantastic if you have a big bill coming up)
🟢 Lease Purchase 🟢
▪️ Exactly the same as a Hire Purchase agreement, aside from having a final balloon payment.
🔵 Finance Lease 🔵
▪️ No need to put VAT up front. Deposits can be as little as 1 payment up front to whatever you need it to be.
▪️ VAT is spread amongst the deposit and monthly payments so these are all plus VAT on your agreement. (This means you can only claim back the VAT you've already paid retrospectively.)
▪️ Same applies for offsetting against your tax bill. You can only offset payments that you have already made.
▪️ Having the balloon at the end makes this a really easy agreement to upgrade your vehicle every few years. Provided you take care of it the trade in value should take care of the balloon as well as leaving you equity to go towards the new one.
💰 Outright Purchase 💸
▪️ Exactly what you think. No fuss, no interest and a brand new vehicle that you own from the start.
▪️ Can be offset against your tax bill, and all of the VAT can be re-claimed in year 1.
Have any questions about the best way to purchase your next company vehicle?
Fancy getting some quotes together for that work truck?
Need help deciding what van is best for you and your company?
Give me a call, send me a message, drop me an email... Happy to help 😊 👍
[email protected]
www.rapidvans.co.uk
01446 502 955
We specialize in business van leasing and help new and established companies find the perfect van through leasing. We are top van leasing choice in the UK.
