Different Car Loan Options for Business Use
What many people do not know is that there are numerous kinds of car loan options that one can choose from, depending on one’s needs. There are loan options for cars that are acquired for personal use. On the other side of the spectrum, there are also car loan finance options that are specifically designed for businesses and other commercial organizations. This is why if you wish to provide company cars to your employees, or would like to have vehicles on hand for business use, get to know your business car finance options thoroughly.
Hire Purchase is the first option that you need to consider. This is a rental agreement that basically works in a rent-to-own capacity. With hire purchase, you will be able to lease any vehicle that you want for a specific term of your choosing, ranging from one to five years. Full use of the vehicle will be given to you, throughout the term that you chose. However, ownership of the car belongs to the lender throughout the duration of the term. You can only take ownership of the vehicle once you have paid your last payment at the end of the term.
Next up is Chattel Mortgage. Much like a secured loan, the vehicle that you are purchasing will be used as security for the loan. Basically, the funds to pay for the vehicle or chattel will be advanced to you by the lender. A mortgage will then be taken out on the vehicle as security. As soon as you have paid off all your loan obligations by the end of the term, this mortgage will then be removed. Unlike hire purchase, however, you get to own the vehicle right from the start.
Car Finance Lease
The third business car finance option that you should consider is the Car Finance Lease. This rental agreement allows you to choose the type of vehicle to lease, as well as the duration of the lease, so it is actually quite a flexible option. First of all, you can choose any type of vehicle that you want, which the finance company will then purchase on your behalf. You can then lease the same vehicle from the finance company for a certain term, often between 36 to 60 months, at a fixed monthly rate. At the end of lease term, you can then gain full ownership of the vehicle by paying its residual value. You also have the option to either trade-in the car to lease a new vehicle, or simply continue the lease.
A Novated Lease is the fourth business car finance option available. If you wish to provide both your existing and potential employees with vehicles as part of their remuneration package, then this is a great product to consider. Basically, a novated lease is undertaken by three parties, which are the employee, the employer, and the finance company. The lease’s monthly payments are paid to the finance company by the employer on behalf of the employee, while at the same time, deducting the same amount from the pre-tax salary of the employee. Responsibility for the lease will automatically revert to the employee if he leaves the company for any reason.
Low Doc Car Loans
The fifth option that you need to consider is Low Doc Car Loans. This is specifically made for small business owners or self-employed individuals who have very little financial documentation. Most mainstream rental agreements and car loans often require mountains of paperwork in order to be processed. This does not apply to low doc car loans. With this process, the usual “red tape” that is associated with applying for a loan is effectively done away with because lenders will use other means to verify income.
In a nutshell, your options when it comes to getting a car loan for your business use are aplenty and rather comprehensive. As always, it is important to do your homework and get to know each option thoroughly in order to make the best possible decision for you and your business. Do not just go for the first option that is offered to you. Take your time and consider both your long-term and short-term goals. You will not regret it.
More inLoans & Credit
Baby No-Show? Here’s Why These Celebrities Chose to HIDE Their Babies from Us
Some celebrities tend to publicize their pregnancies to the point where they seem to share every OB/GYN appointment with the world...May 26, 2021
The 3 Kinds of Investors in eSports and Why You Should Know about Them
Over the last decade, esports have converted from a niche gaming sub-culture to a phenomenon, with global revenues exceeding $1 billion by...May 26, 2021
How Brexit Impacted Britain’s Hierarchy Among the Other Nations
Somehow Boris Johnson was right, as the process of Brexit seems like it has been a source of national humiliation (their...May 23, 2021
Stocks That Dramatically Increased In The Last Few Years
When it comes to investing, it is always a gamble because only time could tell whether you made the right decision...May 23, 2021
These Hollywood Stars Made Huge Credit Card Mistakes, but We Don’t Have to
We often look in awe at celebrities. The work they do, the lives they live, it’s all so glamorous! But some...May 23, 2021
College Loans are Not an Issue for Students Helped by these Famous Celebrities
Student loans are a rising problem in the United States. Having a college degree is one ticket so you can get...May 19, 2021
Is Affiliate Marketing For You?
Long before the internet was born, the idea of money sharing has been floated about and has appeared in one form...May 19, 2021
Who Knew that Buying Vintage Cars Could be Such a Good Investment
For many years people invested their hard earned money in property, stocks and even in gold, but investing in vintage cars...May 19, 2021
Single Mother Avoids Homelessness And Mortgage by Building A Tiny Home For $10,000
Life has the potential to spring surprises, leaving us confronting problems which make it essential for us to get back on...May 15, 2021