We recognise that many of our customers see their van as their biggest asset after their client base,so ownership can be really important. Contract Purchase is a great product and can be the best way to achieve this without spending your hard earned cash.
Contract Purchase is an agreement to purchase a vehicle via a series of monthly instalments. Ownership passes to you at the end of the contract following a final payment.
A guaranteed residual value,which enables lower monthly payments,is set by the finance company at the start of the contract,which gives you three options by the end:
- Part exchange and use any equity for the deposit on your next vehicle.
- Hand the vehicle back to the leasing company (subject to mileage and condition).
- Keep the vehicle by paying the optional final payment.
Structurally similar to Contract Hire,Contract Purchase enables you to make fixed monthly payments. However,with Contract Purchase you have the option of retaining the vehicle at the end of the contract.
- Fixed monthly payments
- Choice of contract period from 24 to 60 months
- Purchase cost may be Corporation Tax deductible through Capital Allowances
- Interest elements of monthly payments may be Corporation Tax deductible
- Can benefit from higher residual values
- The option to retain the vehicle at the end of the contract without any depreciation risks
- Road Fund Licence is provided for the full term of the contract
- The convenience of a full maintenance service,at a fixed monthly cost,is optional
- Outstanding instalments appear as a liability on balance sheet
- Vehicle appears on balance sheet
- Not VAT-efficient
This would suit customers who:
Want a more expensive vehicle than their budget would normally allow i.e. A new vehicle instead of a used one.
Want ownership of the vehicle at the end of the contract.
Want multiple options at the end of the contract.
Want fixed cost,stress free motoring.
Can pay all of the VAT in relation to the vehicle up front.
Van Contract Purchase FAQs
Please just click on a question to reveal the answer.
- Why would I buy a van using Contract Purchase rather than Contract Hire or Finance Lease?
- What are the advantages of Contract Purchase?
- How do the costs compare with Contract Purchase to actually buying a van outright?
- With Contract Purchasing when will I have the option to keep my van?
- Do I have to be VAT registered to Contract Purchase a van?
- Can I claim the VAT back on a van through Contract Purchasing?
- Are there any mileage limits with a Contract Purchase agreement?
- Do the CO2 emissions on my van effect my Contract Purchase terms?
- Can I change my van mileage during the Contract Purchase period?
- Can I extend the van Contract Purchase agreement?
- What age to I need to be to take out a Contract Purchase agreement on a new van?
- What deposit do I need to put down to secure the van?
- Do I have to have a credit check if I Contract Purchase a van?
- Does approval take a long time?
- If I am turned down will this reflect on future credit ratings?
- My credit rating is poor,what are the options available to me?
- Are their particular finance companies that deal solely with bad credit ratings?
- What specifically is required to set up a Contract Purchase agreement?
- Do I own the van on Contract Purchase?
- What will happen to the van at the end of the Contract Purchase?
- Will I be responsible for parking tickets and speeding fines etc?
- Who pays for new tyres,MOT and servicing?
- What happens if the van is in an accident during the Contract Purchase period?
- What happens if dents and scratches appear on the vehicle when I return it?
- Can the van be customised,ie,with tinted windows,or lower it?
- Can I take my van abroad during the Contract Purchase term?
- Am I able to race the vehicle?
- Is my insurance going to go up because I have chosen Contract Purchase?
- Is insurance included in the Contract Purchase agreement?
- Can I insure the van under my company insurance?
- Is fully comprehensive insurance compulsory when I take out a Contract Purchase agreement?
- Will I be able to insure other family members to drive the van?
- Can I include insurance in the van Contract Purchase package?
- If I am in an accident do you provide a courtesy van?
My New Van
- Is there a delivery charge?
- What are the colour options?
- Is Road Tax included with Contract Purchase if not how much does it cost?
- Can I transfer my private number plates on a Contract Purchase van?
- Are there any admin charges involved?
- What are the hidden costs?
- Is my van coming directly from the manufacturer or a local dealer?
- What is the time scale for delivery?
- Do I need to be aware of anything when buying a van/pick-up truck online?