The most recent development in the Volkswagen scandal unearthed information that will cause some slight discomfort to VW commercial vehicle owners. The company admitted that 79,838 of its diesel commercial vehicles were involved in the recent emissions-rigging scandal. It’s no surprise that a number of Volkswagen owners are concerned about the resale value of their vehicle following these events. Early signs following the scandal from Glass’s car valuation experts showed Volkswagen’s resale value fell by 0.2pc in September, compared to a 2.8pc rise in the wider market.
Of course, those who have obtained commercial vehicle finance lease would not have been worried financially, as they would have agreed a fixed monthly payment prior to this drop in value. On the other hand, those who leased these vehicles due to their advertised favourable fuel economy may have been a little displeased. Undoubtedly, the situation raises the question as to whether it’s more beneficial to seek commercial vehicle finance as an alternative to buying a vehicle outright. In our latest blog post, we discuss the key benefits and options when acquiring commercial vehicle finance to buy a new van.
Van finance, or indeed any commercial vehicle finance agreement makes budgeting simple as it provides the flexibility to spread the cost of the vehicle over an agreed period, with fixed monthly repayments.
Purchasing a van outright can have a huge initial financial impact. You will have to pay for the vehicle itself as well as taxation, registration and other fees. When you choose to take out commercial vehicle finance you pay a low deposit, typically 10% or less, allowing you take immediate delivery, meaning you can get the job done straight away.
A hire purchase agreement will enable companies to manage their budget effectively over the repayment term. Plus, when the repayment term is finished, the company owns the vehicle. Companies wanting to maximise the use of the vehicle without the responsibility of owning it may wish to consider a Finance Lease.
Whereas VAT is paid in full at the onset of a Hire Purchase agreement, VAT is payable on the monthly rentals of a finance lease agreement. The primary lease term, rate and repayment figure are fixed. At the end of the primary lease term, the company can choose from the following options:
- Enter into a secondary rental period
- Choose to sell the asset and receive the majority of the sale price
- Return it to finance provider
When it comes to commercial vehicle finance for your van NGI can help. We offer a range of commercial vehicle finance options including lease, operating lease and hire purchase agreements. Contact us today with your requirements and find out why our business has accrued a reputation for providing excellent service.