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Finance Options Explained: A Brief Guide To Available Finance Options

What is Hire Purchase?

Hire Purchase/Conditional Sale is one of the most common methods of funding a vehicle purchase.

A simple and traditional way to finance your vehicle over a fixed period for a fixed monthly repayment.

The loan is secured against your vehicle and once all the repayments due under the terms of the agreement have been made you take ownership of the vehicle.

New Vehicle Solutions Limited will help you determine the amount you need to borrow and establish the loan term most likely to keep your repayments affordable now and in the future

What are the benefits of Hire Purchase on a Van or Commercial Vehicle for you and your business? 

We speak with a number of business owners who do not have a full understanding the benefits of Hire Purchase for their business. 

Hire Purchase seems to be the 'Old Fashioned' way to finance a commercial vehicle, why is that? 

The minimum deposit required for a Commercial Vehicle is generally the FULL VAT of the Van purchase cost. On occasion, the finance provider may request and additional 10% or 20% in addition to the VAT.

If you or your business are VAT Registered - You are able to then reclaim the VAT in your next VAT Quarter.

If you are NOT VAT Registered - It's 20% of the vehicle cost that you may not be able to reclaim.

(We always advise that you discuss any finance option with your accountant or business advisor)

Hire Purchase is an OWNERSHIP AGREEMENT - What does that mean? 

‘Ownership Agreement’ simply means: At the end of the agreement - Once you have paid EVERY payment - You Own the vehicle.

You don't have to hand it back or sell it on at the end of the agreement - It is now your vehicle to do with as you choose.

There are several adaptations of Hire Purchase:- Lease Purchase, Contract Purchase, Hire Purchase with a Balloon, Etc. 

If you are unsure of the agreement that you are quoted or offered, It is this simple:

With a Van or Commercial Vehicle - An Ownership Agreement: YOU WILL PAY ALL OF THE VAT AS A DEPOSIT. 

If the required or requested Deposit is less than the Total VAT Amount of the vehicle cost....It is NOT an Ownership Agreement. (*This could be potentially a Finance Lease - a Usership Agreement - You have to sell the vehicle at the end of the term)

(If VAT is charged on every payment (Rental) then it is NOT an ownership agreement)

Hire Purchase Agreements generally are for periods of 2 to 5 Years: Offering a FIXED MONTHLY PAYMENT for the duration of the agreement.

Most Hire Purchase Finance Providers will charge a ‘Finance Documentation Fee’ & ‘Option to Purchase Fee’

These fee’s can either be ‘Spread’ across the term of the agreement or be paid with the first monthly repayment & last monthly repayment.

You and your business take responsibility for the maintenance and general upkeep of the vehicle.

It is a requirement that the vehicle remains Legal, Road Taxed and Fully Comprehensively Insured for the duration of the agreement.

Are there any Tax Advantages to you and your business? 

There are several TAX advantages for Hire Purchase:

Annual Investment Allowance (AIA) being one of the main advantages: 

A commercial vehicle can be classed as 'Plant & Machinery' 

This offered you the option to offset up to 100% of your vehicle purchase cost against T.A.X in a 12 month period.

Annual Investment allowance is currently set at £250,000 - This will reduce significantly in 2016.

(*Speak with your accountant or business advisor about the options and the TAX Advantages of purchase)

If you would like a quotation for your New Van - Please call: 01656 654 321

Vehicle finance for businesses is a complex area and recommending the correct funding solution will depend on many factors including:

  •  Business Status
  •  Cash Flow
  •  Other Borrowings
  •  Vehicle Usage
  •  Suitability and Affordability

Application Process:

New Vehicle Solutions Limited will assist with calculating the amount of finance required to complete your vehicle acquisition. This calculation is likely to include the purchase price of the vehicle your are considering less any part exchange and or cash deposit 

As part of the loan approval process, personal details for each applicant will be passed to one or more Finance Companies. Typically the personal information required to assess your loan application will be as follows: 

  • Full Name Date of Birth 
  • The address(es) where you have lived for the last 3 years 
  • Home Owners status - Owner / Tenant Telephone number(s) Employer(s) you have worked with for the last 3 years 
  • Marital Status 
  • Bank Account number and Sort Code
  • Income and Expenditure information (Demonstrating Affordability)
  • Supporting Financial Information and Documentation may sometimes be requested.

Credit searches will be undertaken with one or more Credit Reference Agencies 

In most scenarios, the Finance Company decision to accept / decline your loan application will be immediate although some applications might take longer to process 

Once accepted / declined New Vehicle Solutions will complete all necessary regulatory paperwork with you ensuring you have a clear understanding of the finance agreement you are entering into 

  • A copy of each applicants Driving Licence (both parts) will be required to confirm your identity. You may also be asked to provide supplementary documentation as part of the approval process 

  • Proof of comprehensive vehicle insurance may also be required Note: The Loan approval process for finance obtained via 3rd Party providers may vary from the steps outlined in this illustration

Within our organisation there are a number of finance options we are able to provide. Based on our discussions and your responses to our questions we will have narrowed down this selection to the one that may be most appropriate given your personal circumstances and requirements. We do however believe it is important that in making the decision you are aware of all finance options we have available (some of which may not be applicable in your particular circumstances) and have relevant information on the options available. Further information on the types of finance options we are able to offer can be obtained from organisations such as the Finance and Leasing Association or the Money Advice Service

To ensure you get the very best advice, you should seek professional guidance from your accountant or a Business Finance Specialist.

Any agreement for vehicle funding will be completed without advice and based on your explicit instructions.

New Vehicle Solutions Ltd is authorised and regulated by the Financial Conduct Authority, our firm reference number for consumer credit is 685872 New Vehicle Solutions Ltd is an Appointed Representative of AutoProtect (MBI) Limited which is authorised and regulated by the Financial Conduct Authority for Insurance Mediation, their reference number is 312143. We are a credit broker and not a lender.

We are permitted to conduct Credit Brokering, Debt-Adjusting and Debt-Counselling in connection with the whole or partial settlement of credit agreements for vehicle finance and consumer hire agreements.

Company Registration Number: 8572112 – VAT Number: 166595858 Registered Office: New Vehicle Solutions Ltd, Tremains Road, Bridgend, CF311TZ

New Vehicle Solutions Limited does not and will not charge any fees for providing any Consumer Credit services. 

Some of our lenders may charge an administration fee to set up your agreement. 

Whichever lender we introduce you to, we will typically receive commission from them (either a fixed fee or a fixed percentage of the amount you borrow). The lenders we work with could pay commission at different rates. However, the amount of commission that we receive from a lender does not influence the amount that you pay to that lender under your credit agreement. Any renumeration amounts can be requested and disclosed prior to the conclusion of the transaction.

You can check this on the FCA Register by visiting the or by contacting the FCA direct on 0300 500 8082

Calls may be recorded for training and monitoring purposes.

Last update: 10/05/2021

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We are serious about your data security

Fair Processing Notice

To abide with General Data Protection Regulation legislations (GDPR) we would like to make you aware of how we protect and use any personal data submitted by you to New Vehicle Solutions Limited;

The personal data we collect from you will be used for the following purposes:

Broker services to supply a vehicle and/or finance for this vehicle’

This includes:

  • To process and provide quotation(s)
  • To process your application for finance (Should you choose to proceed)
  • To process your vehicle order
  • Review your finance product as part of an on-going client relationship
  • To respond to complaints and enquiries
  • To keep you informed regarding any new products or services that may be of interest to you

All of the afore mentioned will be confirmed via email mailing and/or telephone communication.

You may withdraw this consent at any time.

By consenting to this you are giving us permission to continue with your enquiry.

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*Full details of New Vehicle Solutions Limited Data Protection Policy can be found here

All offers are based on either Finance Lease or Contract Hire Agreements, These offers are subject to change at any time, you must be 18 or over and finance is subject to status and acceptance, vehicle availability and terms and conditions apply. Failure to maintain payments may result in termination of your agreement and the vehicle being returned, this could affect your credit rating and make it more difficult to obtain credit in the future. All prices correct at time of publication. Error and Omissions excepted. Finance Lease / Business Contract Hire - *Available to Business Users Only (Self Employed / Sole Traders / Partnerships & Limited Companies & PLC) Subject to Status & Finance Acceptance. Figures quoted are based on Customer Maintained Agreements (It is the responsibility of the hirer to maintain the vehicle) Maintained Quotations available on request. Excess mileage and vehicle reconditioning charges may apply (Contract Hire). Hire Purchase / Lease Purchase - *Available to Business and Personal Customers & Consumers, Subject to Status & Finance Acceptance. Personal Contract Hire - *Available to Personal Customers & Consumers, Subject to Status & Finance Acceptance, Figures quoted are based on Customer Maintained Agreements (It is the responsibility of the hirer to maintain the vehicle) Maintained Quotations available on request. Excess mileage and vehicle reconditioning charges may apply (Personal Contract Hire). All vehicle images and vehicle descriptions on this website are for illustration and reference purposes only and are not necessarily an accurate representation of the vehicle on offer. Finance provider documentation fees may also apply. Alternative agreement types terms, mileages and deposit quotations are available on request. New Vehicle Solutions Ltd does not and will not charge any fees for providing any Consumer Credit services. New Vehicle Solutions Limited can introduce you to a number of finance providers, we may receive a remuneration if you enter into an agreement with them. Calls may be recorded for training and monitoring purposes.

NVS Van Insurance