A Guide to Van Hire Purchase Finance
Hire purchase (HP) finance is becoming an increasingly popular method of paying for a van, allowing you to cover the cost of a vehicle in manageable instalments.
If you are considering a van hire purchase agreement, here is what you will need to know.
What is Hire Purchase Finance?
Hire purchase is a type of van finance, which enables you to spread the cost of a van over a number of months, rather than buying it outright.
How Hire Purchase Finance Works
When you enter a hire purchase agreement, you will make an initial deposit, which will be deducted from the total cost of your van and then the remaining amount will be divided by to give you the amount that you will pay each month.
When you apply for HP van finance with Eden Commercials, you will be able to select your preferred deposit amount and contract length and we will present you with a fitting quote.
What Happens at the End of a Hire Purchase Agreement?
Until you have made all of your monthly repayments and your agreement term is up, the van will legally belong to your finance provider, but once you are all payed up, ownership will be transferred to you.
Pros and Cons of Hire Purchase Van Finance
The best way to decide whether or not van hire purchase finance is the right option for you is to weigh up the pros and cons:
Pros
- Easy monthly instalments, rather than one large upfront cost
- You may be able to afford better, high specification vans
- Fixed monthly repayments
- You get to keep the van at the end of an HP agreement (with a lease deal, you would have to return it)
Cons
- The van does not officially belong to you until the end of the contract and can be repossessed if repayments are not made
- Chances of approval for van finance may be dependent on your credit rating
Essentially, van hire purchase finance is an excellent option as long as you are able to keep up with your repayments. Before applying for an agreement, you should therefore identify a realistic monthly budget, ensuring that you take the cost of owning a van into consideration. While your credit score can affect the likelihood of approval, Eden Commercials has partnered up with van finance providers who specialise in bad credit van finance, so your chances of securing a deal with us are good.
Apply for van finance with Eden Commercials online today!