BUSINESS CONTRACT PURCHASE
Your van is often your biggest business asset, a way to maximise your business profits and deliver the highest standard of service to your own customer base. Our Business Contract Purchase option helps you make the most of your van with a set series of monthly payments throughout the length of your term.
At the end of your contract period, ownership will pass to you after you settle a final payment, giving you the freedom to deal with your asset as you see fit. Whether that means part exchanging the vehicle and using the profit as a deposit on your next new van purchase, handing the vehicle back to the leasing company (subject to mileage and vehicle condition), or keeping the vehicle for further business use.
Vehicle ownership is one thing that isn’t offered across many van finance products. With Business Contract Purchase however you can benefit from retaining your van once your contract has come to an end without the risk or cost of vehicle depreciation.
The ownership of the vehicle come the end of the term and the prospect of guaranteed residual value aren’t the only advantages that go hand-in-hand with this popular van finance product. The fixed monthly payments across a term of between 24 and 60 months provide the accurate costs and certainty businesses need to forecast correctly and grow their companies from strength to strength. With fixed price, monthly add-ons like full maintenance and servicing, you can also precisely project other commercial vehicle running costs, meaning you can enjoy low, fixed cost motoring as standard.
Whilst Business Contract Purchase may not be the most VAT efficient option, there are reliefs available. The purchase cost may be tax deductible for instance when claimed as a capital allowance.
Is it right for me?
For customers who want to own their own vehicle at the end of the contract, and explore further options such as part exchange, return or business use, Business Contract Purchase is the ideal option. It’s also a route to fixed cost, hassle free motoring with the low monthly repayments and maintenance option (also payable monthly) providing ultimate peace of mind. Those looking to enjoy a more expensive vehicle than their budget accommodates will see further options open to them with Business Contract Purchase, with many customers able to finance the purchase of a new vehicle instead of a used van.
The vehicle however will need to be included on your business balance sheet with outstanding instalments appearing as liabilities, which could be an issue for some customers. You must also be able to pay all the VAT due for the vehicle upfront.
For further information about this van finance product or any other of our flexible finance options, please contact our team direct.