Photo Caption: David Spear & Finance Expert & General Manager Geraint Yeo
With a wide range of lease and hire options now more accessible than ever to those looking to purchase their first commercial vehicle or expand their corporate fleet, cutting through the jargon to ensure you get the right finance product for you is vital. There are several routes you can explore as a commercial vehicle buyer, and here David Spear Commercial Vehicles reveals just what you can get for your money courtesy of the flexible services their company offers and the other products currently available on the market.
“Here at David Spear Commercial Vehicles, we offer two primary methods of lease and hire, the lease purchase, with balloon payment at the end, and hire purchase, which involves larger monthly payments but with no balloon payment due at the end of your contract period. With each, the main benefit is that you, the customer, own the vehicle at the end, but other lease and hire products on the market aren’t that simple or advantageous,” said Owner David Spear.
Contract hire may be one of the vehicle finance options that you are most familiar with and whilst, as David explained, its benefits include a low initial outlay, 100% reclaimable VAT on light commercial vehicles (LCVs) and reduced administration, the simple fact is that the hirer does not own the vehicle. In addition to this for non VAT-registered businesses, the VAT reclaim opportunity cannot be realised, and customers classed in this category have full liability. Contract hire is also not suitable for companies with unpredictable mileage and excess mileage charges apply in instances where limits are exceeded.
Finance lease options also carry similar disadvantages with the risks of ownership and potential residual value losses experienced by many customers in today’s market.
“Contract purchase packages are often described as delivering the best of both worlds, but for larger, VAT-registered companies the disadvantages outweigh the advantages. With hire purchase or lease purchase however, the fixed monthly payments and tax offset interest element of repayments ensures paying off a vehicle in full over a 24- to 60-month period can be done with ease by non VAT- and VAT-registered business customers alike,” concluded David.