Your Best Financing Options when it Comes to Purchasing a Van

Buying a van – especially if it’s a van that you will be using for your business – is a major decision and should never be taken lightly. After all, your decision could affect your business’ profits and growth in the long term. But if you have decided that you really need a van for whatever reason (be it for transporting and delivering goods, for providing a specific service and so on) then you should take some time to get to know your options for purchasing one. Here is a list of your best financing options when it comes to purchasing a van.

Pay with cash?

Ideally, you should purchase a van – or any other vehicle for that matter – with cash. But this isn’t really an option that is realistic for everyone. For one, not many of us have the cash on-hand to pay for a van outright. Unless you have plenty of savings and you can afford to pay for it with cash without seriously affecting your business’ cash flow, then you are better off settling for the other options on the list.

your-best-financing-options-when-it-comes-to-purchasing-a-vanPay with a bank loan?

Some individuals and business owners may choose to pay for a van with a loan from a bank. But this is where the situation becomes a bit tricky. First, you have a loan that can last from one to six or seven years. You also have to realise that with a bank loan, your repayments every month can actually be higher compared to other vehicle financing options. Another factor is this: if you don’t have a good credit rating, you may have a difficult or challenging time applying for a bank loan. This is also true if you are just a start-up business and don’t have much credit rating to speak of.

Consider a hire purchase agreement

Another option that is attractive for most business owners (and which most business owners can afford) is a hire purchase agreement. This type of agreement usually consists of you paying for a deposit for the vehicle of about 10 percent. Afterwards, you simply make a fixed payment every month to the financier. Keep in mind, though, that during this period the vehicle isn’t technically yours yet – it is only when the vehicle payments are over and done with that the ownership of the van will be transferred to you.

What about vehicle leasing?

Vehicle leasing (such as the service offered by www.vansdirect.co.uk) is another option that you may want to consider. This arrangement is more comparable to rental for the long term, where you also make fixed payments every month so you can use the vehicle until the expiration of the contract. With vehicle leasing, payments are usually lower compared to other kinds of van financing deals. However, you may have to deal with restrictions regarding mileage.

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