The VW Caddy is one of the most important assets for UK businesses. It serves as a reliable vehicle for organisations of all sizes, from sole traders to large multinationals.
As commercial vehicle prices continue to rise, financing has become an increasingly popular option for businesses to access these vehicles without the requirement for large upfront investment. If you’re considering purchasing a VW Caddy van on finance for your business, here’s a guide to help you:
Your primary options are Vehicle Asset Finance or Business Contract Hire. The two financial products have distinct differences:
Finance a VW Caddy Through Asset Finance
Asset finance involves a lender purchasing the vehicle, allowing your business to lease it from them over a set period.
Advantages of Asset Finance for a VW Caddy:
- No large upfront payment, helping your business to preserve cash flow
- Lease payments are often tax deductible: to be 100% sure, check with your accountant
- Flexibility in deciding what to do with the vehicle at the end of the lease
- Customisable agreement terms to fit your business requirements
- Well-suited for purchasing a used VW Caddy or a fleet of them
Aspects of Asset Finance to Consider:
- The vehicle remains the lender’s property until you purchase it outright (if you wish to do so)
- The application process may involve more paperwork compared to personal car finance
Using asset finance to acquire a VW Caddy could be the most suitable option, especially if you need to upgrade or modify the vehicle for specific business purposes. For example if you require a refrigeration system to transport perishable goods, asset finance can cover both the vehicle and the modifications.
Finance a VW Caddy through Business Contract Hire
Business Contract Hire is similar to personal car leasing. You select your deposit and mileage, then pay fixed monthly instalments for a set period. The lease is under your company’s name, and at the end of the term, the VW Caddy is returned to the leasing company.
Advantages of Business Contract Hire:
- No depreciation costs, because you don’t own the asset
- Significantly lower initial deposit
- Monthly payments may be tax-deductible if the vehicle is used solely for business
- Short lease terms (typically 2-5 years) allow for regular upgrades, keeping your business up to date with the latest technology
- Lender covers the cost of maintenance
- Fixed costs simplifies your financial forecasting
Aspects of business contract hire to consider:
- The leasing company retains ownership of the VW Caddy
- Mileage restrictions apply, with potential penalties for exceeding mileage limits
- Early termination fees may apply
Other types of commercial VW Caddy finance
Finance Lease: Similar to business contract hire, but with the option to purchase the vehicle at the end of the agreement.
Sale and Leaseback: You sell your VW Caddy to a finance company, and then you lease the vehicle back from the finance company for an agreed period of time.
Which Finance Option is Right for Your Business?
We provide finance solutions for:
- Sole traders
- Limited companies
- VAT-registered businesses
- Partnerships
- Public listed companies
- Charities
Choose Asset Finance If:
- You need flexibility in repayment terms, and the deposit amount
- You wish to add vehicle modifications
- You are looking to purchase a fleet of VW Caddy’s
- You’re looking to purchase a used VW Caddy
For instance, a small courier business that needs multiple VW Caddy vans with custom storage solutions may find asset finance the best option.
Choose Business Contract Hire If:
- You want a hassle-free process to lease a new VW Caddy
- You prefer predictable, fixed monthly payments
- You want to avoid the responsibilities of vehicle ownership – the lender covers any maintenance costs
Is the VW Caddy the Right Vehicle for Your Business?
The VW Caddy is a versatile and compact commercial van, offering a car-like driving experience with impressive fuel efficiency. Given the Caddy’s variety of models, (Caddy Cargo and Caddy Maxi) it caters to a wide range of industries, from courier services to tradespeople requiring a practical and professional choice.
If you’re ready to finance a VW Caddy for your business, contact our team today to explore your options.
