Confused.... Business Finance Leasing?

[Bristol spark]

Am in need of a new van deal, and have been looking at Finance Leasing the Van, but i am now confused how it goes at the end of the deal.

This is the figures. 48 month deal.


Retail Price £20K + Vat


Initial Rental - £617 + vat

47X Monthly - £206 + vat

Final balloon payment - £8750 + vat

Arrangement fee - £125 + vat


So over 48 months that is a total of £19,174 +vat (all good so far)


Now this is the bit i don't really understand. It mentions at the end the van is sold to a third party, but also user is responsible for disposal

Now say it sells for £8K + vat at the end, Does this £8K go to the lease company or the user/customer?

So basically how does it all work out (roughly) at the end?

Cheers

[Eric Mc]

And you haven't even considered the differing tax and VAT treatments.

[CaptainSlow]

These deals are quite rare. Assume this is with Network via a broker?

Double check how the vehicle gets sold, however, if the van gets sold for £8k you are liable for the difference to the balloon...you benefit if it sells for higher.

[Bristol spark]

CaptainSlow said:

These deals are quite rare. Assume this is with Network via a broker?

Double check how the vehicle gets sold, however, if the van gets sold for £8k you are liable for the difference to the balloon...you benefit if it sells for higher.

Thanks, so essentially once the lease company has all the monthly payments, plus the balloon payment, the lease company is happy, and anything else it sells for is mine?

So the lease company will only want £19,174+vat on a £20K +vat van.....

So I'm now struggling to see how they make any real money on this? (obviously they are not paying the retail price) but doesn't seem a great deal of profit for them.

Yes its via a broker.


One thing at a time Eric

[Eric Mc]

The tax and VAT treatments can make a huge difference.

[CaptainSlow]

Bristol spark said:

CaptainSlow said:

These deals are quite rare. Assume this is with Network via a broker?

Double check how the vehicle gets sold, however, if the van gets sold for £8k you are liable for the difference to the balloon...you benefit if it sells for higher.

Thanks, so essentially once the lease company has all the monthly payments, plus the balloon payment, the lease company is happy, and anything else it sells for is mine?

So the lease company will only want £19,174+vat on a £20K +vat van.....

So I'm now struggling to see how they make any real money on this? (obviously they are not paying the retail price) but doesn't seem a great deal of profit for them.

Yes its via a broker.




One thing at a time Eric

Correct they don't pay retail and correct there isn't a great deal of profit. It's a volume game.