Have you been considering starting a business where a van would be a vital part of your operations? Or, do you need to change or upgrade your van to make it work harder for your business? Getting the right van can make your life a lot easier. And so too can getting the right finance package for your van.

Being able to spread the cost of your new van into manageable monthly payments can help give a real boost to getting your business up and running. The good news is that finding an affordable finance package has never been easier than it is with Creditplus. Here’s our complete guide to van finance.

How it works

Van finance works the same way as car finance. What you need to do is complete an application form and you’ll soon be given a range of different finance options based on your own personal circumstances and what you are looking to borrow.

Before you get to this stage, you can use a car finance calculator to see how much a package is likely to cost across the length of the agreement and also how much you will likely need to pay each month. You can use this in your business plan if you are planning on starting a business, or you can use the figure to see how it fits into your current business’s monthly income.

You should also check your credit rating. This will affect the cost of your van finance package, so it’s a good idea to examine this and see if there are any steps you need to take to improve your current credit score.

What finance is available?

There are three main types of finance product available for van finance:

Hire purchase: This type of finance package has fixed monthly payments (so no variable rate of interest). The entire cost of the finance package is divided between the monthly payments, including the interest that you will be charged across the entire length of the agreement. That can make it easier to work out what budget you need to pay for the van. At the end of a hire purchase agreement, you own the van. Find out more about hire purchase.

Personal contract purchase (PCP): This type of finance package offers you a lot of flexibility with three options at the end of the agreement. Owning the van at the end is optional, so you don’t pay off the entire cost of the vehicle across the finance package. Instead you pay the depreciation in the van’s value between the start and end of the agreement. It’s important that you know your annual mileage, as this will affect the amount you are charged for the payments. Find out more about personal contract purchase.

Lease purchase: In a lease purchase finance package, part of the cost of the van is deferred to the end of the agreement. This means your monthly payments are lower. There are no mileage restrictions on a lease purchase agreement as, once you’ve paid off the final payment at the end of the agreement, you own the van. Find out more about lease purchase.

Do I need to have found a van already?

If you have found a van that works perfectly for your business, then great! Creditplus will help you find a fantastic van finance package to match. Simply pass the details of the vehicle you want to your customer advisor and they will do the rest.

If you don’t know exactly what you’re after, Creditplus can help too. We can search our database of thousands of commercial vehicles to find the van that fits your business. Whether your transporting cakes or grand pianos, there are so many options available. Not only will we help you find the van and the finance package, we’ll also deliver the van direct to your doorstep. We’ll also carry out an RAC approved vehicle check to make sure that the van is ready to go for your business.

Creditplus can only provide van finance on vehicles under 3.5 tonnes in weight, that are no more than 5 years old at the start of the agreement, and do not have over 100,000 miles on the odometer.

Are van finance payments tax deductible?

The good news is that van finance payments are treated the same as if you were to buy a van outright for your business, so you can deduct these from your tax burden at the end of the financial year. If you use the van exclusively for your business, then you can claim 100% of the cost. If you use it for anything else, then you may need to work out what percentage of the van’s use is for commercial reasons. It’s a good idea to speak to an accountant as they will be able to give you the most up-to-date information on how you can claim the payments on your tax return.

What if I’m self-employed?

You can get a van finance package if you are self-employed. All you need to do is be able to prove your income. This can be done with your bank statements. Most lenders require at least three months of bank statements to prove you earn enough to take out the finance package. Creditplus and our lenders don’t want to put you into financial difficulty, so we make these checks to help ensure you can afford the finance package. If you have any questions, contact your Creditplus customer advisor and they will be happy to help.

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