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You pay an advance rental followed by a fixed number of monthly rentals over an agreed contract period.
To help bring down your monthly rentals, and improve cash flow, you can choose to take an optional balloon payment. The payment of the balloon is made at the end of the primary contract period. We will need an expected annual mileage to help us with this calculation. VAT is paid on the monthly rentals whereas with a purchase finance option the customer would be required to pay the whole VAT up front.
At the end of the term there are two options. Even though you do not own the car, you can sell it on our behalf. You keep 100% of the sale proceeds, which you can then use as the advance rental for your next new vehicle. You may be able to offset this advance rental against your taxable profits**. Alternatively, once all the rentals and any balloon payment are paid, you can continue your contract with us by entering a secondary period of rental. You will pay a “peppercorn rental” of just £50 a year plus VAT. So, if your vehicle is still working hard for you, maybe with bespoke decals or fittings, you have the option to keep using it or replace it – the choice is yours!
© 2024 W R Davies
W R Davies (Motors) Limited, Haughmond View, Sitka Drive, Shrewsbury Business Park, Shrewsbury, SY2 6LG. Company Reg: 347316, VAT No. 650915047
W R Davies (Motors) Ltd is authorised and regulated by the Financial Conduct Authority (Ref No 307432) for consumer credit purposes. Please be aware lenders may pay us a commission for introducing you to them. This commission can be based on the amount you borrow or the vehicle you purchase. Different lenders may pay different commissions for such introductions. Any commission amounts lenders pay will not affect the amount that you pay under your finance agreement, all of which are set by the lender.
