If you’re self-employed, having a van can be crucial to your business! But if you need an upgrade or looking for your first van, you may be wondering what is the best way to fund your van? You should also consider what type of van you need and your users as this can affect which type of funding is best for you! UK Car Finance are a finance provider who specialises in helping people who are self-employed get a car or van finance! They have put together a guide to choosing the best van for your business.
Use Cash Or Savings:-
Having the cash or savings there to buy a van for your business can be really beneficial! You can get the van you want from a dealer or private seller, sell the van when you are done with it and do as many miles as you want! Using cash or savings to pay for a van for your business can be one of the cheapest options available. However, not many people have that kind of money saved up or are willing to spend their savings on a big expense. You will also be responsible for the repair and maintenance cost, insurance, and road tax of your van.
Get Approved For Van Financing:-
Getting a van on finance can be a cost-effective way of spreading the cost into affordable monthly repayments. A finance deal such as Hire Purchase allows you to spread the cost of your chosen used van. You could use some of your savings as a deposit for a van which can reduce your monthly payments. Hire purchase is a secure loan that spreads the cost of your van into monthly payments with added interest to an agreed term. At the end of the term, you then have the option to own the van outright. There is no mileage restriction so you can use the van as much as you like! The loan is secured against the van though, this means you won’t own the van until the end and if you fail to make your repayments on time, the lender can take the van off you.
You should also note that most van finance deals will require you to pass a credit check before you are accepted. If you have a low credit score, it can be worth increasing your score before applying for finance. However, there are also many bad credit finance options with affordable monthly payments.
Lease A Van:-
Leasing a van is a form of renting and can suit you if you don’t want to own the van. Many businesses and self-employed workers opt for leasing a van as it’s easy and cost-effective! Leasing usually means a small deposit upfront and then fixed monthly payments. Monthly costs tend to be below as you are essentially hiring the van from the leasing company. Maintenance costs are also usually included in the monthly payments. Also, if you are VAT registered, you can usually claim the VAT back to make it more affordable for you. At the end of your contract, you will return the van to the leasing company in good condition. This means that you will agree to mileage limits and may have to pay for additional mileage and any damage charges at the end of the contract. Leasing a van will also require a credit check against your business or for personal use.