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Finance Lease Explained: is it for you?

Finance Lease is a rental agreement suitable for hiring selected commercial vehicles from a funder. The Funder will remain the legal owner of the vehicle and therefore you cannot sell the vehicle without making all of the payments due under the agreement in full. With a Finance Lease Agreement, you pay fixed monthly rentals over an agreed primary rental period. These rentals will attract Vat. The rentals are calculated on the VAT exclusive price of the vehicle.

Finance lease may not be suitable for you in the following circumstances;
-If you are using the vehicle for a certain business e.g. taxi or a driving school .
-If you plan to export the vehicle
-If you do not want the residual value risk.

At the end of the Finance Lease agreement, assuming all monthly rentals have been made, including the ‘balloon’ rental where applicable, you may either sell the vehicle on behalf of the Funder (and receive the sales proceeds net of any outstanding charges) or maintain use of the vehicle for a further rolling 12 month secondary period for a fixed annual rental.

If you are still not sure or would like more information, please do not hesitate to contact us and speak to one of our experienced sales team.

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Posted on 23rd May 2016 at 10:48 AM

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