Vehicles can be a major expense for a business is it a good idea to tie up capital or use Truck Finance?
We have spent 16 years to become specialists in the Truck Finance market.
On top of paying for fuel, repairs and maintenance you also need to determine how you plan to pay for the vehicle itself.
Are you going to pay cash, use finance to lease or spread the cost of the truck?
Below, you’ll learn about the factors that can affect whether it’s better to buy or use Truck Finance.
- How much mileage will the truck accumulate over the term?
Mileage is one of the biggest limitations that leased vehicles have as opposed to owned vehicles.
The lender doesn’t want too much wear and tear the vehicle before returning it, they put a cap on the number of miles you are allowed to drive the vehicle throughout its term.
Exceeding this limit will incur an additional mileage charge. If you feel confident that you know how many miles the vehicle will be able to be driven, you’ll be able to ensure that the contract doesn’t prohibit you from using the vehicle as much as necessary.
If you need the truck to cover a lot of miles, you will get less favourable terms from the lender.
This will vary on a case by case basis, but it makes it more likely that frequent vehicle users will usually be better of buying the vehicle or financing it instead of taking a lease option.
2. How Long Do You Plan To Keep The Vehicle?
How long do you plan to keep the vehicle will also influence whether you should rent or buy it.
It does not make sense to pay for a vehicle that could last many years if you only need it for one or two. There may be a certain stage of your business or a certain event which necessitates a vehicle that you wouldn’t otherwise need.
You should also be aware of the additional charges that lease companies will make once trucks are returned at the end of the lease period.
Items such as scuffed wheels, scratches dents to bodywork missing logbooks will all attract sure charges from the lease company.
If you run several vehicles this can quickly add up to a significant sum.
You can ask the company for a list of charges so you can ensure no high fees at the end along as you make sure the assets are returned in a condition that meets the lease companies requirements.
If you require new trucks regularly then financing those vehicles is the most cost-effective way so you do not tie up too much working capital in depreciating assets.
3. At the end of the finance term
If you are unable to get a list of the chargeable items the British Vehicle Rental and Leasing Association can supply a copy.
It is much better to have a clear understanding of these costs as they should be factored into your business plan as a real cost in several years time.
4. Can I finance a used Truck?
Yes we are experts in this field and it is very common for us to work with customers for used truck finance. The process is exactly the same as with a new truck.
We arrange finance for both new and used trucks on a monthly basis.
We hope you find the article useful and welcome any questions on this subject, all of our staff are experts within this field and carry many years of experience.
At Kingsgate Finance, we’re proud to offer our services for a variety of different commercial needs. One of our specialities is truck finance. We have spent over 16 years really getting to know this niche, which is why we understand the terms you need in order to help your business succeed.
If you want to learn more about what we can do for you?
Please call us at 020 3959 9490 or fill out one of our application forms and we will get straight back to you