What financing options are available for a double cab van?
If you want to purchase a double cab van, there are various financing options available. You can pay in cash, opt for a financial lease whereby you become the economic owner and can reclaim the VAT immediately, or an operational lease whereby all costs are included in a single monthly payment. The choice depends on your liquidity position, tax situation and how much you want to arrange yourself. Financial leasing often requires a down payment of 10-30% of the purchase price, while operational leasing usually does not require a large down payment. In this article, we answer the most important questions about financing a double cab.
What are the main financing options for a double cabin?
For a double cabin When purchasing a van, you have three main options: cash purchase, financial lease, and operational lease. With a cash purchase, you pay the full amount in one go and become the owner immediately. Financial lease means that you pay monthly and are the economic owner, allowing you to reclaim VAT. Operational lease is an all-inclusive formula where you pay monthly without becoming the owner.
A cash purchase gives you full ownership and freedom, but requires a large one-off investment. You have no monthly obligations, but you are responsible for maintenance, insurance and all other costs. This option works well if you have sufficient liquidity and do not need financing.
At financial lease you pay a fixed monthly amount for an agreed period. You are registered as the economic owner, which means that the van is included in your balance sheet. The big advantage is that you get the VAT back immediately with your first tax return. You can lease the car up to the purchase price excluding VAT. Trade-ins or partial payments are also possible. Car costs such as repairs, maintenance, insurance and road tax are at your own expense, which means you have complete control over them.
Operational leasing is organised differently. You also pay monthly, but you do not become the owner. In exchange, maintenance, insurance and other costs are often included in the monthly amount. This provides clarity and predictability, but less control over how you maintain or insure the van.
What is the difference between a finance lease and an operating lease?
The main difference lies in ownership and responsibilities. With a financial lease, you become the economic owner and the double cab van is included in your balance sheet. With an operational lease, the leasing company remains the owner and you are effectively renting the vehicle. This has significant implications for your administration, taxes and what you need to arrange yourself.
At financial lease you pay a fixed amount per month, with the interest rate set in advance and remaining unchanged throughout the term. This means you know exactly where you stand. As you are the economic owner, you can reclaim the VAT directly on your first tax return. You therefore pay VAT on purchase, but this amount is refunded in full. You do not pay VAT on the monthly amount, as you have already paid it.
The security for the financier is the vehicle itself, which serves as collateral. If you encounter financial difficulties and are no longer able to meet your payment obligations, this will be recovered from the car. You are responsible for maintenance, repairs, insurance, and vehicle tax. This gives you complete control over these costs and choices.
With operational leasing, things are different. You pay a monthly amount that often includes maintenance, insurance and sometimes even tyres. You don't have to deal with garages and insurers yourself, but you also have less freedom in these choices. At the end of the contract, you simply return the van without having to arrange anything with regard to sale or residual value.
For start-ups and self-employed professionals, financial leasing is often the best option. As a start-up, you already have a lot of expenses. With financial leasing, you have the advantage of not having to pay large sums of money all at once. For self-employed professionals, it is a godsend because it is never convenient to make large expenditures. With financial leasing, you spread your expenses and know what you are paying, so you can keep your finances under control.
How much of your own money do you need to finance a double cabin?
The required down payment varies depending on the type of financing and the provider. With financial leasing, a down payment of 10-30% of the purchase price is common, but this is not always mandatory. The more you pay up front, the lower your monthly payments will be. With operational leasing, you can often start with little or no down payment.
With a finance lease, you can also opt for a final instalment in the agreement at the actual residual value. This results in an even lower lease term. This means that you pay a larger amount at the end of the term, but have lower monthly costs during the term. This can be interesting if you expect your cash flow to improve in the future.
Trade-in of your current commercial vehicle or partial payment are also possible. If you have an existing van that still has value, you can often trade it in. The trade-in value will then be deducted from the purchase price, reducing the amount you need to finance. This lowers both your own contribution and your monthly payments.
The balance between your own contribution and monthly payments is personal. A higher own contribution means lower monthly payments and often less interest paid over the term. However, it also means that you are taking more liquidity out of your business. For many entrepreneurs, it is important to keep liquidity available for investments, stock or unexpected expenses. Think carefully about what works best for your situation.
What costs are involved in financing a delivery van?
In addition to the monthly amount, there are various other costs involved in financing a double cab. With a finance lease, you pay interest that is determined in advance and remains unchanged throughout the term. There are also administration costs for drawing up the contract and registration. These costs vary per provider, but transparency about them is important.
Insurance is mandatory for all forms of financing. For commercial vehicles, there are special packages that offer third-party liability and comprehensive cover throughout Europe. Many insurance policies for vans cover standard lettering up to certain amounts, work risks associated with tail lifts or cranes, driver's luggage and legal assistance. Financing often includes a present value clause added, which means that in the event of a total loss, the residual value of the financing will be paid out instead of the usual current market value.
With a finance lease, maintenance, repairs and vehicle tax are at your own expense. This gives you control over these costs, but you do need to take them into account in your budget. Depending on the make, model and use, maintenance costs can vary considerably. A well-maintained double cab van retains its value better and causes fewer problems.
There may be termination costs at the end of the contract. With a finance lease, you have the option to take over the van at its residual value, continue driving with a new contract, or sell the vehicle. If you sell the car and the proceeds exceed the residual value, the difference is yours. If the proceeds are lower, you must pay the difference.
Early repayment is possible, but the conditions vary depending on the financier. Some charge a penalty, while others allow it without additional costs. Ask about this in advance if you think you may want to repay early. Because you are the economic owner in the case of a financial lease, you may also put stickers or advertising on the van without the financier's permission.
How Van Den Hurk assists with financing your double cab
We understand that financing is an important decision for your business. That is why we offer transparent financial lease solutions that suit your situation. With over 60 years of experience in commercial vehicles, we know exactly what entrepreneurs, self-employed professionals and fleet managers encounter when financing their double cab vans.
Our approach is personal and transparent. We request minimal information for an application because we operate differently from traditional banks. Our goal is to make it as easy as possible for you. At a bank, you have to provide everything; we request everything. We conduct as much business as possible by telephone and email, which allows us to save on office costs. We pass these savings on to you in the form of the most competitive offer possible.
What we arrange for you:
- Financial lease with fixed monthly payments and fixed interest rates throughout the entire term
- Direct VAT refund with your first return
- Flexible terms tailored to your depreciation and business operations
- Option to trade in your current van
- Transparent prices with no hidden costs
- Personal advice on the best financing option for your situation
- Support with insurance specifically for commercial vehicles
- No other collateral required other than the vehicle itself
Our extensive range of 400 commercial vehicles means that you will always find a suitable double cab that fits your budget. Whether you choose a used or new van, we will guide you from advice to delivery. You can easily view our current range on our website and set up a stock alert for the model you are looking for.
Would you like to know what financing options are available for your desired double cab? Contact us for a no-obligation consultation. We are happy to help you find the best solution for your business, so you can get off to a fresh start with the van that suits you perfectly.
