Van Finance Lease

A finance lease agreement consists of an initial payment followed by a series of monthly payments, ending in a final rental or “balloon” payment. This series of payments covers the entire cost of the vehicle.

The value of the monthly payments, which can take place over anything from 1 to 5 years, can be adjusted by increasing or decreasing the initial payment or the balloon payment. For example, larger balloon payments lead to lower monthly rentals.

A balloon payment is the final payment at the end of a finance lease agreement. It can be set to any amount, and a high balloon payment will reduce the cost of the monthly payment.

Van Ninja will never set the final balloon payment higher than 100% of the predicted value of the vehicle at the end of the lease (based upon expected mileage and reasonable wear and tear).

Be wary of leasing companies setting the balloon payment too high. If it is above the value of the vehicle when it is sold, you will be left with an additional sum of money to find.

There are a lot of reason to choose finance lease:

• Fixed monthly payments
• Contract period can range from 24 to 60 months
• Monthly payments are 100% tax deductible
• Can arrange to keep using the vehicle after the end of the primary lease term
• No mileage or damage penalties
• Balloon payment can be adjusted to reduce the monthly payments significantly
• You do not need to be VAT registered
• You retain most of the vehicle equity at the end of the contract

There are a few things to keep in mind when looking at a finance lease deal:

• The value of the vehicle could drop below the value of the balloon payment, leaving you to make up the balance, if the vehicle exceeds expected wear and tear or mileage
• You cannot own the vehicle
• You are responsible for the maintenance and servicing of the vehicle and associated costs

With Contract Hire agreements, you are required to return the van to the hire company at the end of the term. You will then be charged for any excess mileage or repair costs you may have incurred.

With Finance Lease, so long as you pay the balloon payment at the end of the term, the van’s condition is not important. However, if you intend to sell the van to clear the balloon payment, excess mileage or damage might reduce the price.

Finance Lease is also much more flexible in terms of getting the monthly payment to a value you are happy with, as the balloon payment can be adjusted (within reason) to compensate.

Van Ninja negotiate directly with the manufacturers on your behalf, and as such we can provide a substantial discount compared to the price you would pay independently. The total value of the payments you make through a finance lease deal brokered by Van Ninja will be significantly lower than the On The Road price set by a dealer.

Finance lease is suitable for sole traders, partnerships, and limited companies.

The requirements are different for each business type.

For sole traders, you should be prepared to provide identification, proof of address, and personal/business bank information.

For businesses, including partnerships and limited companies, you need to provide proof of address, contact details, and business information (including company name and registration numbers) along with bank information.

There are no mileage limits.

However, as the final payment is based on the residual value of the vehicle, excess mileage could lead to the vehicle’s value being less than your balloon payment.

At the end of a finance lease agreement, you have two options.

1. You can sell the vehicle to a third party and use the money to pay the final balloon payment. If the vehicle is sold for more than the balloon payment, you will keep up to 98% of the excess. As you are selling the vehicle on behalf of the finance company (who own the vehicle) they are entitled to 2% of the sale value after the balloon payment is deducted. 
2. You can pay the balloon payment without selling the vehicle, and then enter into a secondary rental agreement, also called a “peppercorn” agreement. This allows you to rent the vehicle for an additional year for a small fee, usually around the cost of a single month’s rental fee from the original lease agreement. 

No. Due to the tax status of the vehicle, it remains the property of the leasing company. It can be sold on to a 3^rd party on behalf of the finance company, so you can use the sale value to clear the balloon payment.

Once sold to a 3^rd party, the vehicle is no longer bound by the leasing contract and can be bought and sold as any other second-hand vehicle.

There are no charges or penalties issued by the finance company for wear and tear or damage to the vehicle.

However, as the final payment is based on the residual value of the vehicle, any damage could lead to the vehicle’s value being less than your balloon payment.

You can. However, please carefully read the terms and conditions that come with your finance lease. Depending on the lender, there may be a minimum term length before you can settle, and there are often additional fees to settle the lease early.

If you have any questions related to a Finance Lease Agreement please give us a call. Our experts are happy to talk you through the details of your agreement so you can decide if it’s the right option for you.

*Business customers only.

No. Finance Lease is available whether you are VAT registered or not.

Yes. The finance companies we work with will need to carry out a credit check before approving you for a finance lease agreement.

Once we receive all your information, your credit check will take around 48 to 72 hours to complete.

The information we require will be different depending on whether you are a sole trader, partnership, or limited company. We will request this information when you have accepted a leasing quote from us and are prepared to move to the next stage.

We can still find you a finance company if you have a bad credit history. While we can’t guarantee that everyone will be approved for finance, we work with a range of different lenders and we will do everything we can to help you lease a vehicle.

Van Ninja work with many different finance companies, which allows us to compare a range of different offers to find the best deal for you.

No. You are responsible for insuring the vehicle.

Your insurance policy must be Fully Comprehensive for the duration of the lease contract.

Yes. When leasing a vehicle, we require you to insure your vehicle with a Fully Comprehensive insurance policy.

Yes. The lease agreement does not prohibit additional drivers on your insurance.

Van Ninja or our finance lenders do not provide courtesy vans. If you require this service, you will need to arrange it with your insurance company.

Yes. The insurance must be in the same name as the finance lease, but that can be your name, trading name, or limited company name.

No. Delivery is carried out by qualified drivers to anywhere in the UK at no cost to you.

If your vehicle is a stock order, it will be supplied by one of the dealerships we have partnered with. It will be a brand new van with delivery mileage only.

If your vehicle is a factory order, it will ship straight from the assembly line to your delivery address.

For stock orders, we can deliver your van within 2 to 3 weeks once your finance application has been approved.

For factory orders, it can take between 6 to 12 weeks, so you should bear this timescale in mind when applying.

No. Making such a big purchase online can make some customers a little nervous, and we fully understand this.

Van Ninja are part of Dawsongroup, one of the largest van rental and leasing companies in the UK. We have an excellent pedigree, and we work hard to give our customers the best deal we can find.

Our staff will work with you through every step of the process, keeping in touch over the phone and by email, from your initial enquiry to the day you receive your new van, and beyond.

Yes, you can. There may be a small administration fee from the finance company to set this up. Speak to us for more information.

Yes, though we recommend you contact us or the finance company first before carrying out any modifications. Please be aware that any modifications you make might reduce the value of the vehicle to less than the balloon payment at the end of the contract.

No. Due to the vehicle’s tax status, you cannot own the vehicle during or after the finance lease agreement.

However, you do retain any equity in the vehicle once it is sold. If you sell the vehicle at the end of the contract for a greater value than your balloon payment, you will keep the difference (less a 2% admin fee for the finance company).

While the vehicle is being leased, it is on the finance company’s books as an asset and leased to you.