The Top 7 Finance FAQs That You Need to Know
It’s Finance Friday! We’re covering the top 7 frequently asked questions in finance and making the world of finance that little bit easier to understand.
1. Can I have a finance lease in my personal name?
Unfortunately, the financers we use do not provide loans to private individuals. Leases are processed through businesses and companies that are Value Added Tax registered, for example: sole traders, partnerships and limited companies. However, we do offer very competitive prices on hire purchase agreements.
2. What happens at the end of a finance lease agreement?
At the end of the primary period of the agreement, there are three options:
- Return the vehicle to the lessor, who will sell it and refund any surplus sale proceeds to you as a rebate of rentals (this figure is usually around 95% of the surplus sale proceeds with some being retained by the lessor to cover administration costs).
- You can act as an agent for the finance company and arrange for the sale of the vehicle to an independent third party. The finance company receives the full sales proceeds and will refund you a fixed percentage of any surplus that is generated as a rebate of rentals.
- You can continue to use the vehicle for as long as you want on payment of an annual secondary rental, commonly known as a peppercorn rental. This is normally equivalent of one monthly rental.
3. What happens at the end of a Hire Purchase agreement?
In a Hire Purchase agreement, you pay an initial deposit and then pay off the entire value of the van in monthly installments. When all the payments are made and an option to purchase fee is paid, the hire purchase agreement ends and you own the car. We covered the differences between our two leasing options in our previous blog, Finance Lease Vs Hire Purchase.
4. How long can I finance my van over?
Vantastec offer 24, 36, 48 and 60-month finance agreements.
5. Can I settle my finance agreement early?
Hire Purchase – You can choose to pay off any remaining finance in a single lump sum, called a settlement figure. Your HP contract will outline if you’ll have to pay any extra fees should you decide to end your finance agreement early.
Lease – A finance lease can be settled at any point during the term, although sometimes only after the first 12 months. However, penalties for doing so can often be high. Details will be set out in the terms and conditions of the agreement.
At the end of the primary period of the agreement, you must have fully paid all the rentals, including any balloon. The customer then has the three options as explained above.
While paying off a finance agreement early won’t hurt your credit, keeping it open for the loan’s full term and making all the payments on time is viewed positively by the scoring models and can help your credit score.
6. Can I pay a larger sum in addition to monthly payments?
This option is only available with one of our providers and can only be done on an HP agreement.
You’ll need to make the payment to the finance company and they’ll advise of any additional fees that may occur.
This will result in either a reduction in monthly payments or a choice to lower the term – ask a member of the sales team for more details!
7. What is the min/max deposit on lease and HP?
- Minimum VAT plus 10%
- Max – none
- Minimum £1500 plus VAT
- Max – none
We hope this edition Finance Friday has been useful – as always, if you have any questions for us before applying for finance, contact our finance department. We’ll be happy to help! We are a credit broker and not a lender, but always happy to help you make an informed choice.