Van Finance Explained

 

At Zebra we are truly independent - selling all makes and models.

We can offer all varieties of funding and to help we have explained the attributes of each funding product below.

You can't get access to these discounts in a dealership.

In More Detail…

It can seem confusing when you hear terms such as Lease Purchase, Contract Purchase, Contract Hire, Operating Lease but…

            There are only really two types of vehicle funding products

            Hire Purchase            – payments without VAT

            Lease                         – payments with VAT

There are subsequent variations of these products to offer different treatments of the vehicle at the end of its life – either you dispose of it or you give it back.

You Owe Nothing at the End

Hire Purchase and Finance Lease can both be structured so that you repay the full amount financed and the vehicle is yours to dispose of in the future. This is known as ‘fully amortised’ funding.

Advantage

·         No mileage restrictions

 Disadvantage

·         No protection against 2^nd hand market valuations

·         Probably no professional experience of selling vehicles

·         Low return if sold at auction or private

·         No ability to budget whole life costs with indeterminate future sale price.

·         High monthly outgoings

You Owe a Balloon Payment Equal to the Expected Future Value

Hire Purchase in this instance is sometimes called Lease Purchase or HP Plus. The finance payment profile is set at the beginning to reduce monthly outgoings by deferring a large element of the repayment until the end of the agreement when the customer expects to either have the money to repay the ‘balloon’ or the customer sells the vehicle to repay the lender.

Advantage

·         This is a great way to reduce your monthly outgoings.

·         You’re balloon payment is fixed.

Disadvantage

·         No protection against 2^nd hand market valuations

·         Probably no professional experience of selling vehicles

·         Low return if sold at auction or private

·         No ability to budget whole life costs with indeterminate future sale price.

Hire Purchase now becomes Contract Purchase. The lender agrees to buy back the vehicle from you for an agreed price at the end of the agreement. You don’t have to take the lender up on the option – you can decide to keep the vehicle but you must pay the lender the pre-agreed balloon.

Finance Lease now becomes Contract Hire or an Operating Lease. There is no obligation to include fixed price maintenance spend although some customers assume incorrectly that this is a feature.

The big feature of both Contract Hire & Contract Purchase is that they are mileage based contracts. If you decide that your initial mileage expectation has changed – up or down - just call to re-calculate the monthly payments

Advantage

·         Easy to budget with fixed rentals.

·         Sell the vehicle to a third party for a profit if the 2^nd hand market increases in the future (only with a Contract Purchase agreement).

·         Benefit from leasing company registration bonuses

·         Benefit from higher resale values.

Disadvantage

·         Excess mileage can be charged if you vary greatly from the contract.