Finance Lease (FL) is a contract to lease a van or truck for business purposes, very similar to Business Contract Hire (BCH).
You'll agree on an initial rental, annual mileage and the duration of your lease agreement, but you won't be able to walk away from the vehicle as you can with BCH.
A Finance Lease includes a balloon payment that represents the value of the vehicle at the end of the lease. It will be necessary for you to sell your vehicle to a third party and then pay the sale proceeds to your funder. You keep the difference if you sell your van for more than the funder valued it (for example, if you kept it well or didn't use your mileage allowance). However, if you sell for less (e.g. the vehicle is damaged or the mileage is exceeded) you will have to pay the difference.
Finance leases include Road Tax for the first 12 months only.
Is Finance Lease the right option for you? Or maybe you'd benefit more from Business Van Contract Hire? Click below to compare these two popular van leasing options.
FINANCE LEASE VS BUSINESS CONTRACT HIRE
Need any help choosing the right business van lease deal?