It can be said that buying a vehicle is one of the most important decisions you can make for your business, as it can seriously affect your cash flow as well as your prospects in the long run. But if it’s necessary, it’s necessary, right? However, you would want to make sure that the decision you make is the right one. That being said, you should get to know your options in regards to vehicle financing. One option favourable to most (and said to be the simplest option as well) is a hire purchase agreement. But what is it and how can it be advantageous to you?
What is a hire purchase agreement, and how does it work?
Basically, a hire purchase agreement is a contract where you make arrangements with a dealer or retailer to pay a down payment deposit of about 10% of the vehicle’s value. The down payment deposit can vary from one retailer to another. After making the deposit, you can make monthly instalments for the vehicle which can last from one year to five.
With a hire purchase agreement, you are essentially ‘hiring’ the vehicle until your final payments are made. After your final payment, the vehicle is technically yours. Keep in mind that the rates are often better for new vans than for used vans.
The benefits of a hire purchase agreement for your business
There are many benefits you can get from a hire purchase agreement, one (obvious one) of which is the ability to save money and not dig too deep into your savings. But there are other less obvious advantages to a hire purchase agreement as well.
One prime advantage is the fact that you can choose more flexible terms when it comes to repayment. You can choose to pay off the vehicle in one year, or, if you are cash-strapped (or just starting out), you can choose to make payments over five years. However, just like with any financing agreement, the longer your term, the higher the interest rates will be.
Another advantage to a hire purchase agreement such as one from www.vansdirect.co.uk is the low deposit. In fact, the deposit for hire purchase agreements is lower compared to other financing deals. You can also benefit from a fixed rate of interest, which allows you to adequately plan your budget every month. Additionally, once you have settled payments for half the vehicle’s cost, you may have the option to return the vehicle.
Without a doubt, a hire purchase agreement is one definite option for any business owner in the UK. You can take advantage of a wide array of deals and financing options when it comes to hire purchase agreements from various dealers and retailers. Just make sure to choose the right retailer by doing a comparison so you know you are getting a good service.
Image attributed to stockimages/FreeDigitalPhotos.net