The Solutions PCP allows you to make payments over 18 months to 3 years.
VWFS will set the Guaranteed Future Value or GFV of the vehicle. This will be the minimum value your vehicle will be worth at the end of the PCP agreement, provided it is within the agreed mileage and in acceptable condition.
A Solutions PCP may allow you to drive a higher specification vehicle for the same payments when compared with Hire Purchase. This is because the GFV and deposit are deducted from the On the Road RRP and payments are based on the remaining balance plus interest.
At the end of the agreement you have three choices:
Pay the outstanding amount and own the vehicle.
Return the vehicle to Volkswagen Commercial Vehicle Finance and walk away (subject to terms and conditions).
Part exchange the van and begin a new agreement on another new or used vehicle.
Traditional method to fund vehicle.
You agree an appropriate deposit, then the balance is spread equally over one to five years.
You agree a fixed monthly payment over the fixed period.
You get tax relief on all Hire Purchase interest payments.
Tax advantage through capital allowances is 40% on new and used vehicles up to 24 months old followed by 25% annually.
At the end of the period, you have full ownership of vehicle. (subject to terms and conditions)
Fixed payments help you to plan monthly operating costs.
Contract Hire can include or exclude full maintenance package.
All contracts are based on an annual mileage over the set period of contract.
Contract Hire is a very tax efficient form of funding.
Rentals can be offset 100% off balance sheet against taxable profit.
No disposal or depreciation problems.
Helps free up your business capital.
Lower monthly rentals thanks to VAT advantages.
No worries about the future value of the vehicle.
Contract Hire is available over one, two, three or four years.
We also have a range of fully managed, fixed cost elements that can be added to your Contract Hire agreement to take care of the maintenance of your van and the provision of a replacement one if it is ever needed. This means you can budget for your monthly costs in advance, and it is usually possible to recover the VAT in full on any of these elements too.
Leasing or Lease Hire is a very tax efficient form of funding
Fixed repayments which will attract VAT on a monthly basis.
Rentals offset 100% on balance sheet against taxable profit.
There are two types of Finance Lease, both available over 1-4 years:
Full Payout where there is no final rental
Balloon – reduce your rentals by deferring a proportion of your vans value until the end of the agreement.
At the end of either agreement, you can either:
sell the van on behalf of the finance company and collect a percentage of the proceeds from the sale^
or extend the lease by paying an annual peppercorn rental of 4% + VAT of original (VAT exclusive) invoice price, payable annually in advance.
Pay the balloon rental and extend the lease by paying an annual peppercorn rental of 4% + VAT of original (VAT exclusive) invoice price, payable annually in advance.
Balloon lease – at the end of the agreement, stretch the balloon rental over a period that takes the total length of the agreement to a maximum of 60 months
^The price must exceed the final rental cost.