Spreading the cost of your new van over a pre-agreed minimum term often makes your purchase so much more affordable. However, there is a lot to consider and it can be quite daunting looking at different funding options. That is why here at Perrys Used Van Outley we have put together some frequently asked questions to help you navigate your options.
Van finance FAQs
Should I Buy a Van on Finance?
There are several benefits to buying a van on finance, but the decision should ultimately dependent on your financial circumstances and preferences.
When you take out a van finance agreement, you are forming what is referred to as a ‘tri-party agreement, meaning that yourself, the supplier, and the finance company each have a vested interest in the van until your agreement ends, regardless of how big of a deposit you've paid. This can be useful should you encounter any problems, as the finance company is inclined to rectify them.
Taking out van finance as opposed to buying a van outright does mean you'll have monthly payments to account for, as opposed to one lump sum when buying outright.
It's extremely important that your decision is based on what you can realistically afford – don’t over-stretch yourself!
What's the difference between a Personal Contract Purchase, Conditional Sale, Finance Lease, and a Personal Loan?
To show the differences between the three types of van finance, we've listed each one's unique features below:
Unique Features of PCP (Personal Contract Purchase)
- You can easily swap to a new van at the end of your PCP agreement
- The monthly payments tend to be lower
- You can encounter additional charges for going over your mileage allowance or damage
- If you want to keep the van at the end of your contract, you'll have to pay what's referred to as a “balloon payment”, or a “minimum guaranteed future value” – this is the remaining sum owed on your agreement
- You don't own the van (unless you choose to buy it at the end of your agreement) - you're technically renting it
- You have the option to retain, return or replace the vehicle at the end of your agreement
Unique Features of CS (Conditional Sale)
- Unlimited mileage
- You own the car at the end of the agreement and after the final payment
- You have a fixed rate of interest and fixed payments for the duration of the agreement
- You can settle the agreement at any time
Unique Features of Finance Lease
- Lease the vehicle for an agreed period of time. Switch to the second period of the lease with a nominal annual rental, sometimes referred to as a ‘peppercorn rental’
- VAT recoverable on rentals*
- Risk or reward on disposal of the vehicle
Unique Features of a Personal Loan
- You don't always need a deposit
- Personal loans for vans tend to be less easily available - you'll need a good credit history to obtain one
- You can't terminate the arrangement
- You'll need to visit the bank to arrange the loan
Can you Apply for Van Finance to be in Joint Names?
No. If you're applying for van finance, it must be in the main driver's name or business only.
Can Van Finance be Paid Off Early?
You can pay off your van finance early, but you may have to pay a fee for early termination, depending on the lender or type of finance package taken.
Can Van Finance be Transferred to Another Van?
In some cases, you can refinance and set up a new deal with another van – speak to us at Perrys Used Van Outlet if you want to find out some more about this.
Will a Finance Application Have an Impact on my Credit Rating?
Applying for van finance will require what's referred to as a ‘hard search of your credit report. This is likely to show on your credit record, and if you have several hard searches on your report in quick succession, it can have a negative impact.
At Perrys Used Van Outlet, our pre-approval process lets you check whether or not you're likely to be eligible for van finance by conducting what's referred to as a 'soft search of your credit report. This doesn't affect your credit score, as the trace it leaves on your report can't be seen by potential future lenders.
The pre-approval process simply helps you to work out what you're eligible for, without damaging your credit score.
Can I Part Exchange my Current Vehicle?
Yes. To find out more about part exchanging your van, head to our part exchange page
Can I Get Van Finance if I Have Bad Credit?
Van finance with bad credit is not guaranteed; however, we work with a variety of lenders to find the right deals for our customers. We offer options for those who have had credit issues in the past so get in touch with us if you’d like to find out more.
Can you Buy Used Vans on Finance?
Yes you can buy a used van on finance – find out more about the different van finance options above.