Whether you’re looking to upgrade your current model or purchase your first van, the costs can initially seem very overwhelming.
But as this MoneyHelper.org article explains, there are a number of different ways to finance a vehicle. Let’s look at a couple of the more popular options.
Hire Purchase
Under a hire purchase agreement, it is possible to put down a deposit on a van and then pay the rest of the outstanding purchase amount over a period of time.
Generally, hire purchase payments are made on a monthly basis. Interest on the outstanding balance will be incurred and the expected monthly payments can often be quite substantial. The best way to minimise your monthly payments using this financing method is to put down a larger initial deposit.
When browsing used vans for sale Bath, it is advisable to look for a second-hand van specialist such as cotswoldvancentre.co.uk/buy/used-vans-for-sale/bath that offers flexible financing options guaranteed by a service that specialises in motor finance. This will allow you to buy with confidence.
Personal Contract Purchase
As with hire purchase financing, with a personal contract purchase agreement, you will also be required to put down an initial deposit and pay off the rest of the balance via monthly instalments. Personal contract purchase payment instalments, however, tend to be significantly lower than those under a hire purchase agreement, while the total sum of money you will pay tends to be higher.
At the end of the term, you will have the opportunity to finalise your purchase with a one-off final payment which is officially known as a balloon payment. Balloon payments are calculated based on how much your van is currently worth.
If you don’t want to keep the van, you may be able to return it without incurring any extra charges, provided it is within the mileage limit in your contract and the vehicle isn’t damaged. Another option is to trade in your van as part of a part exchange and use the equity you have built as an initial payment towards a new vehicle.