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G.D.Commercials believe that choosing the right finance package to pay for your new vehicle is as important as choosing the vehicle itself, which is why we pride ourselves in the fact that we assist you in getting the best possible package to suit your own requirements.
We understand what you really need as a business: A low cost one stop service you can rely on.
Through our finance house partnerships with Ing Lease UK Ltd & Close Motor Finance we look to provide the most competitive rates in a payment profile to suit you.
Whether you are a private customer or a business customer, please call us to discuss the best method to suit your needs.
The traditional way to finance the purchase of a vehicle, hire purchase enables you to pay an initial deposit and then clear the balance in monthly instalments. At the end of this period, the van is yours.
Benefits of Hire Purchase
– The assets can be used immediately whilst allowing repayments to be staggered, giving companies a better cash flow
– HP agreements are easily negotiated and available
– The most up to date technology can be hired and used to increase company productivity and efficiency
– The hirer can recover the writing down costs and VAT on the assets
– There is a clearly defined financial commitment from the outset
– Security is on the transaction that has been financed thus requiring no additional commitment from the customer
– HP is not repayable on demand unless the customer defaults on the agreement
Leasing is a contract between the leasing company, the “lessor”, and the customer, the “lessee”;
– The leasing company buys and owns the asset that the lessee requires
– The customer hires the asset from the leasing company and pays rental over a pre-determined period for the use of the asset.
– The leasing company can sometimes claim capital allowances on the assets. These benefits are usually passed onto the lessee in the form of reduced repayments.
There are two types of leases :
– Finance Leases
– Operating Leases
Under a finance lease the rental covers virtually all of the costs of the asset, therefore the value of the rental is equal to or greater than 90% of the cost of the asset. The leasing company claims written down allowances, whilst the customer can claim both tax relief and VAT on rentals paid.
The lease will not run for the full life of the asset and the lessee will not be liable for its full value The lesser or the original manufacturer or supplier will assume the residual risk. This type of lease will normally only be used when the asset has a probable resale value; for instance aircraft or vehicles. The most common form of operating lease is known as contract hire. Essentially this gains the customer the use of the asset together with added services. A very common example of an asset on contract hire would be a fleet of vehicles.
A residual value is the value of the asset at the end of the lease term. Residual values play an important role in an operating lease that is used in conjunction with equipment that retains value at the end of the contract period. The residual value will be left out of the rental calculation. Either the leasing company or a third party will take the risk that the asset will not be worth the amount of the residual value at the end of the lease.
Under a balloon rental payments are made over the period of the lease, sometimes a larger payment or lump sum called a balloon payment is made at the beginning or end of the lease period. Often the customer would pay a balloon payment on the last day of their lease.
A lease purchase is essentially the same as HP; the main difference is in the terms and structure of repayments. Some finance companies differentiate Lease Purchase from Hire Purchase by using it where the customer wishes to defer payment of a substantial part of the asset cost until the end of the agreement.