WHILE the new car sales market may have experienced some considerable issues in recent times, the sale of used vehicles has experienced significant spikes in growth, and new or used there is a wealth of car financing options.
Across the globe, used vehicles are being sold at a steadily consistent pace, as economic instability continues to force both households and businesses to spend their money responsibly.
Interestingly, businesses have historically served as key players in the used car sales market, as entrepreneurs have sought to reduce their operational costs through the procurement of affordable vehicles.
Business-owners are not as inclined to purchase cars outright in 2016, however, as they have a wealth of financing options that can help them to invest in the vehicles of their choice.
Car financing for business-owners: The best options
With this in mind, let’s take a look at the best and most rewarding car financing options for businesses, including traditional methods and newer, more innovative alternatives. These include:
Business Leasing
In truth, this is a tried-and-trusted financing method in the modern age, and one that remains a vital component of SMEs in the UK. It is also arguably the staple used car finance option in the current market, and one that has provided a template from which other options have been conceived.
Ultimately, leasing is a breathtakingly simply and risk averse financing options, which negates the burden of ownership and enables business-owners to secure higher quality vehicles.
Traditional business leasing also means that entrepreneurs do not need to worry about the depreciating value of their vehicles, while they can also upgrade their cars according to the terms and length of their agreement.
PCP – Personal contract purchase
An altogether more modern and creative option, PCP has evolved from the traditional business leasing agreement. It is also an increasingly popular option, and one that typically offers lower monthly repayments than leasing as each vehicle’s future value is calculated and treated as the final payment.
The terms of this arrangement also allow clients to settle at any time, while offering numerous options once the contract has reached its natural conclusion. You can make your final repayment and keep the car if so desired, for example, or even part-exchange the vehicle and subsequently settle the agreement.
Much will depend on the value that remains in the car and your business needs going forward, but this type of flexibility can be crucial to small business-owners.
Hire Purchase
Finally, we have the option of hire purchase, which is another traditional financing options that shares many similarities with standard leasing. Clients can usually settle their agreement at a time that suits them, although hire purchasing also entitles them to a potential rebate of interest at the end of the contract.
It is also interesting to note that hire purchase funding is usually relatively easy to secure, making it the ideal solution for start-up ventures and fledgling businesses.
This type of financing agreement is also automatically covered and protected under the terms of the existing Consumer Credit Act, meaning that it is an option that has empowered sole traders, contractors and solo-entrepreneurs for the best part of a decade.
The Last Word
As you can see, while many used car financing options bear incredible similarities, there are also distinct differences that offer competitive advantages depending on the size, scope and nature of your business.
The key is ultimately to select the one that best suits your personal circumstances, so it is crucial that you compare the full range of the market in detail before making a final decision.
Without this approach, you will run the risk of choosing an excessively expensive option or one that is entirely incompatible with the long-term growth plans of your business.
