Finance Lease: Is it the most badly sold Finance Agreement?

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Finance Lease: Is it the most badly sold Finance Agreement for Vans and Commercial Vehicles in the industry?

Finance Lease:
Is it the most badly sold Finance Agreement in the industry? 
I would like to start by saying that Finance Lease is a fantastic finance product,
However it MUST be sold Properly, Fairly & Accurately - When this happens it can work very well for you and your business.

With Finance Lease you currently get the Tax advantages of a Contract Hire agreement - Coupled with the opportunity to make some money on the 'Sale' of the vehicle at the end of the Lease.

ALSO:
Low Deposit - Fixed Payments - VAT Spread across the Payment - 100% Tax Allowances
*PLUS - No Damage Re-Charges or Excess Mileage Charges from the Finance Company*
Where does it all go wrong?
It has been a regular occurrence in the Leasing Industry where the 'Final Payment' or 'Balloon' payment is maximised to give the customer a small 'Monthly Payment' - Basically lying to the quoting system to say that a customer is covering less mileage per annum than they actually are.
Other than the obvious issues this may bring the problem you get is that the value in the vehicle is not worth the same as the 'Final Rental' or 'Balloon' payment....

Who does this effect?
This does not cause an issue to the person that has 'Sold' you the Lease Deal....It causes an issue to YOU the customer.
Any SHORTFALL would have to be paid by YOU the CUSTOMER - 
When you are looking at Finance Lease deals use LOGIC: If it doesn't sound right.....
For Example:
If you are getting the use of a £26,000 Pick Up Truck on a 4 Year Deal and it Costs you £199 +VAT a Month and the Final Payment is £12000 +VAT - And you are covering 30,000 Miles Per annum -
Ask yourself this question: 
"Will the Pick Up Truck be worth £12,000 +VAT  4 Years Old and with 120,000 Miles on the clock?" Hmm....
At the end of the lease YOU the customer has to sell the vehicle for £12,000 +VAT - NOT the person who sold it to you.
That is an example of some of the horror stories we have encountered.
They are not all Horror Stories -

Not all DOOM & GLOOM!
If the Final Rental or Balloon is CORRECTLY Calculated you can (If the vehicle is of a good condition) easily cover the payment with the Sale of the Vehicle at the end of the Lease. (Again USE LOGIC)
Especially when the vehicle is a Desirable Vehicle: A Specialist Premium Branded or Rare Vehicle
On a lot of cases you will actually MAKE MONEY.
 (You retain between 95% & 100% of the Profit made in the Sale of the vehicle)
Exactly what a Finance Lease has been designed to do for you and your business.
VAT is reclaimable (If VAT Registered) or If you are NOT VAT Registered you can offset the WHOLE RENTALpayment inclusive of VAT - Against Pre-Tax Profits. (Commercial Vehicles ONLY)
 *Your accountant can advise you on this* Speak to him about it
Finance Lease CAN and DOES WORK.
Keep the van in good condition, don’t overdo the mileage, and the resale value of the van can be higher than the projected ‘balloon’ so you make a return.
That Simple.


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