Van Hire Purchase
If you are thinking about investing your money to affect a van hire purchase agreement then there are several things that have to be taken into consideration to ensure that you end up with the right van at the right price. Your budget is the first factor that you will need to address when making your next van hire purchase. Being VAT registered can prove to be advantageous because it offers a more tax efficient means of buying your new van.
Van Hire –benefits of leasing a van
You should also consider the benefits of leasing as this option provides many benefits including those of ownership and it also offers more flexibility and the deposit that has to be paid is very low. Leasing offers several benefits including making deposits repayments every three months and the amount of the deposit can be fixed to suit your convenience. In addition, there is more flexibility in terms of repayment whose term can extend to up to five years. You can also pay VAT on a monthly basis and reclaim it on a quarterly basis but only if you are VAT Registered.
When leasing, the repayments will be hundred percent allowable against your taxable profits and the van can also be sold or even part exchanged when the agreement comes to an end. If you want another van hire purchase solution then you should also look at the benefits of hire purchase. You can finance the van hire purchase in different ways and hire purchase in particular is a very traditional option and quite popular as well.
A van hire purchase method involving hire purchase will provide you with several benefits. First of all, the deposit is very low and involves VAT only. Secondly, the repayment can be done in a flexible manner and for a period of up to 5 years. When you make fixed repayments every month you can also control your budget and keep your cash flow position strong. If you are VAT registered then you can also reclaim your VAT deposit.
Also, in a van hire purchase scheme involving hire purchase all of the interest charges over the entire period of the agreement can be easily offset against your taxable profits. Furthermore, in a van hire purchase agreement involving hire purchase your van becomes an asset on your company’s balance sheet and so you can benefit from being able to write down allowances as forty percent in the first year and twenty-five percent in the following years.
However, you will only gain ownership of the van after you have made the last repayment and the finance company deems the agreement to have been completed. Hire purchase is a good van hire purchase option for those who feel that owning the van is a priority. It is also a more cost effective solution in so far as financing your next van hire purchase goes.
It is up to you to decide how you wish to go about completing your van hire purchase. As long as you weigh the pros and cons of each option, there is a strong likelihood that you can make the right choice.
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