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Hire Purchase » Commercial Van hire purchase Commercial Van hire purchaseHire PurchaseOf the various finance methods available, Hire Purchase is perhaps the best known, and more traditional way of funding your new van, and most people understand this type of finance agreement. Deposits are low, and repayment terms are available up to 5 years with fixed monthly payments. For those customers that are VAT registered, the VAT deposit is reclaimable in the next VAT quarter, and the vehicle becomes an asset on your balance sheet, and gets written down 40% in year 1, and 25% per year on a reducing balance over the remainder of the term. Once the final payment has been made to the finance company and the agreement is complete, ownership of the vehicle passes to you. Should you want to settle the outstanding finance early, requesting a settlement figure from the finance company and paying outright with cash will settle the agreement and ownership then passes to you, or alternatively, part exchanging the old vehicle for your next new vehicle, again a settlement figure is requested from the finance company, and the supplier of your new vehicle will then settle the outstanding finance on the old vehicle, and will calculate the new finance figures accordingly. Should the settlement figure be less than the market value of the part exchange, the difference can then be used as part or all of the deposit on the new van, whilst if the settlement is more than the market value of the part exchange, the difference can be added to the new finance agreement, but the deposit will then need to be paid in full. Summary
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