Van Finance Explained
Understand your CV buying options
at Bristol Street Motors
If you want to upgrade your work horse or your fleet, this page will explain the various buying options available when it comes to securing your new commercial vehicle. Please note, some deals are only available to business customers only, so to iron out any queries, ask your retailer direct. Please note, depending on your business status, all prices will be subject to VAT.
Cash Payment
We're happy to take full payment for your vehicle. You can pay this outright and full ownership of the vehicle will be transferred to you. If you've secured a loan to fund this cash payment and do not keep up with the repayments, your vehicle may be at risk.
Business Finance Lease
This is one of the most common form of leasing and is suitable for business customers with smaller fleets. This is a hire agreement whereby you take control of a vehicle for a contractual period - usually referred to as the 'lease period'. You will ordinarily pay an Initial Rental (remembering you are not actually going to buy the vehicle outright). Then you will make fixed monthly payments for the duration of the contract.
There is an option to include a balloon payment at the end of the agreement, (which will reduce your monthly payments) whereby you can pay any remaining credit on the vehicle. This gives the option to sell it on behalf of the finance provider. Alternatively, when the contract expires you can simply extend the lease or return the vehicle and take out a new lease. Some manufacturers may allow you to extend your agreement into a 'secondary' contract period for a nominal annual fee. VAT is payable according to the rental values only, not the cost of the asset.
Hire Purchase (HP)
Hire Purchase is a way to buy a vehicle with the flexibility to choose the amount of deposit and the term of the agreement. As this is a fixed interest agreement the monthly payments will not change during the agreement.
The agreement is secured against the vehicle and you will not own the vehicle until you have made all of the payments, including any option to purchase fee. You can settle the agreement at any point by paying the settlement figure quoted by the finance company. Your vehicle is at risk of repossession if you do not maintain the contractual repayments.
Business Contract Hire
Contract Hire is fixed cost motoring presuming a pre-agreed mileage and expected condition of your vehicle on return over a set period of time. Under this kind of agreement, the vehicle is hired for a set period at fixed monthly rentals. Ordinarily, an Initial Rental is paid. However, you never own the vehicle, so at the end of the contract (from 24 to 60 months) the finance company will collect it and dispose of it. It is possible to include a maintenance package in the monthly rentals. Monthly rentals will depend on the value of the vehicle, length of the contract, and the agreed mileage.
Occasionally you can add packages for servicing and maintenance, meaning less hassle and meaning less hassle and unpredicted costs. You agree an annual mileage as part of this agreement. If you exceed the agreed mileage, and choose to hand your van back at the end of the agreement, then excess mileage charges will apply. Your van must also be in fair condition for its age and mileage.
Personal Contract Purchase (PCP)
PCP is a very popular way to purchase that has some great benefits. It defers some of the vehicle cost until the end of the finance agreement. The deferred amount is known as the Guaranteed Minimum Future Value (GMFV) or occasionally referred to as Optional Final Payment or Balloon Payment. Interest on this deferred amount is included in the monthly payments that you are quoted. You have the flexibility to choose the amount of deposit and the term of the agreement and as this is a fixed interest loan the payments will not change during the agreement.
You agree an annual mileage as part of this agreement. If you exceed the agreed mileage, and choose to hand your vanback at the end of the agreement, then excess mileage charges will apply. Your van must also be in fair condition for its age and mileage.
*At the end of the agreement you have three choices:
- 1. Pay the GMFV in order to own the van;
- 2. Hand the van back.
- 3. Use any value above the GMFV as a deposit against another van (There is no guarantee that there will be any value above the GMFV).
Conditional Sale
Conditional Sale is similar to Hire Purchase but the customer will commit to buying and owning the vehicle at the end of the agreement. There is no option to purchase fee and no option to hand the vehicle back. Ordinarily, the vehicle will be secured with a cash deposit or a part exchange. The remainder of the value is paid by the customer each month, over a period of 2-5 years depending on the agreement.
There are no mileage or servicing requirements as the customer will own the vehicle at the end of the agreement.
Ford Options Cashplan at Bristol Street Motors
If you’re looking for a new or used Ford car or van, but don’t want to be tied down with monthly payments, the Ford Options Cashplan could be a great choice.
It’s a hire purchase agreement that requires a larger initial deposit but provides flexible end of contract options.
How does it work?
Once you’ve selected the Ford that’s right for you, let us know your anticipated annual mileage and choose your agreement length.
You’ll need to make a single upfront payment – this will include interest and fees. After this, you can use the vehicle as your own, with no monthly payments. At the end of your agreement, you will have three options:
Hand the vehicle back.
You’ll have nothing extra to pay, as long as the vehicle is in good condition and hasn’t exceeded the agreed mileage limit.
Keep the vehicle.
You’ll just need to pay the optional final payment, plus the purchase fee.
Choose a new Ford vehicle.
You can trade in your car or sell it privately once you have settled your agreement. Any money that’s left over from the optional final payment can be used as a deposit for your next Ford.
Benefits of the Ford Options Cashplan
No monthly payments
Choose the agreement length that works for you – 12, 24, or 36 months
Flexible end of contract options
Contact your local Bristol Street Motors Ford dealership to learn more about the Ford Options Cashplan.
Terms & Conditions
For all of the finance options, we act as a broker not a lender. Our Finance Lenders may or may not pay us for the introduction. Your vehicle is at risk of repossession if you do not maintain the contractual repayments.
Ford Credit is a trading style of FCE Bank plc. Registered in England: No 772784. Registered Office: FCE Bank plc, Arterial Road, Laindon, Essex, SS15 6EE. FCE Bank plc is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority under firm reference number 204469.
† Ford Options is a hire purchase agreement with an Optional Final Payment due at the end. Your deposit (maximum 35%) and the Optional Final Payment are deducted from the price of the car. The balance plus interest is then split into equal monthly instalments depending on the length of your agreement. As Ford Options is a mileage based agreement, it is important that your anticipated mileage is reflected correctly as it cannot be changed mid-contract.
*Ford Personal Contract Hire is provided by ALD Automotive Ltd, trading as Ford Lease, Oakwood Drive, Emersons Green, Bristol, BS16 7LB. ALD Automotive Ltd is registered in England no. 987418. Finance subject to status. Guarantees and indemnities may be required. ALD Automotive Ltd and FCE Bank plc are authorised and regulated by the Financial Conduct Authority.