Negative Equity Van Finance
- Our negative equity van finance service means you can still change your current van for a new one, even if you have an outstanding loan balance.
At We Finance Any Van, we recognise that being in negative equity can be challenging.
But don’t worry – this position is more common than you might think and, with our support, you can still find a practical and accessible van finance solution that suits you.
At We Finance Any Van, we understand that having an outstanding loan balance can be a significant challenge, but it shouldn’t prevent you from upgrading to a new vehicle. Our negative equity van finance service is designed to help you move forward even if you’re currently in negative equity.
So, how does it all work?
Our simple process is designed to get you behind the wheel of your new van in no time at all.
- Assessment: We evaluate the value of your current van and determine the extent of the negative equity.
- Options: You can either:
- Pay Off Your Existing Loan: Clear the outstanding balance.
- Transfer Negative Equity: Incorporate the negative equity into your new van finance deal.
Whether your current van is unreliable, you need a larger model, or you’re simply looking for the latest features, negative equity should not hold you back. With our help, you can still find a van that meets your needs. When you choose We Finance Any Van, you will have access to an exciting range of makes and models from reputable dealers. New or used, commuter or business-friendly, city driving or offroad adventure – the options are truly endless!
What to Expect from Our Negative Equity Van Finance Service:
- Expert Guidance: Our team specialises in handling negative equity situations.
- Wide Selection: Access to a range of high-quality vans from reputable dealers.
- Tailored Finance Deals: Customizable options to fit your financial situation.
- Simple Application: A hassle-free process to get you on the road.
- Specialist Lenders: A panel of lenders experienced in negative equity scenarios.
- Comprehensive Support: End-to-end assistance throughout the process.
Drive away from negative equity with the van of your dreams – submit an application today!
Getting to grips with negative equity van finance
We know that van finance can get a bit technical, and negative equity is no exception. If you’re unsure whether you’re in negative equity or are feeling overwhelmed by endless terms or conditions, you’re in the right place! At We Finance Any Van, we’re here to make things as straightforward as possible.
Let’s break down how negative equity can affect different types of van finance agreements:
Hire purchase (HP)
HP agreements involve fixed monthly payments over a set period, leading to outright ownership of the van. Negative equity is less common with HP due to higher monthly payments. If you’re in negative equity, you can opt to cancel the current agreement and choose a more affordable van, incorporating the negative equity into the new loan. Although it might not be the vehicle you originally had your heart set on, there are plenty of great quality vans on the market. With our help, you’re sure to find a suitable replacement that fits your preferences and budget.
Personal contract purchase (PCP)
PCP typically has lower monthly payments but includes a final balloon payment if you want to keep the van. This structure can sometimes lead to negative equity. If you’re experiencing negative equity with a PCP agreement, you have three main options:
- Return the Van: You’ll need to handle any excess mileage or damage fees.
- Pay the Balloon Payment: Clear the final payment to own the van outright.
- Trade-In: Use the van’s value as a deposit for a new one, including the negative equity in the new finance deal.
Negative Equity van finance - here's everything you need to know:
I can't seem to secure used van finance by myself - what do I do?
Why Is It Hard to Secure Used Van Finance?
- Depreciation: As vans age and accumulate mileage, their value naturally decreases. This can lead to negative equity if the van is worth less than the outstanding loan amount. Lenders may be hesitant to finance a van that’s already depreciated significantly.
- Loan-to-Value Ratio: Lenders typically look at the loan-to-value (LTV) ratio when assessing finance applications. For used vans, the LTV ratio can be higher due to lower resale values, which might affect your application.
- Condition and Mileage: Vans with high mileage or poor condition can be less attractive to lenders. They may view these as higher risk due to potential repair costs and faster depreciation.
- Credit History: Your credit history plays a significant role in securing finance. If your credit score is less than ideal, it can make getting finance for a used van more challenging.
What Can You Do?
- Explore Specialist Lenders: Some lenders specialise in financing used vehicles, including those with higher mileage or older models. We Finance Any Van has access to a broad panel of lenders who can provide tailored solutions even if traditional lenders have turned you down.
- Consider a Guarantor: If you have a low credit score or limited financial history, having a guarantor can strengthen your application. A guarantor with a strong credit history can provide additional security for the lender.
- Increase Your Deposit: Offering a larger deposit can reduce the amount you need to borrow, making the application more appealing to lenders. This can also improve your chances of approval and potentially secure better terms.
- Review Your Credit Score: Before applying, check your credit report and address any issues that might negatively impact your application. Improving your credit score can increase your chances of securing finance.
- Consider Alternative Finance Options: If traditional finance routes aren’t working, explore other options such as personal loans or even a hire purchase (HP) agreement, which might be more flexible with used vehicles.
- Find the Right Van: Work with our team to find a used van that fits your budget and meets lender criteria. We can help you identify vehicles that are more likely to be approved for finance.
Why does a van depreciate in value?
Depreciation is the reduction in the van’s value over time, influenced by several factors:
- Age and Mileage: Older vans with higher mileage will generally lose value more quickly.
- Brand Reputation: Vans from reputable brands with a history of reliability tend to hold their value better.
- Features: Vans with more modern features or technology may retain their value longer.
- Condition: Well-maintained vans will depreciate more slowly compared to those that are neglected.
- Market Demand: Vans that are in high demand or part of growing trends, like hybrid or electric models, may depreciate more slowly.
Do new vans depreciate quicker than used vans?
Depreciation of New Vans
- Immediate Drop in Value: As soon as a new van is purchased, it experiences an immediate depreciation. This initial drop is usually substantial, often a significant percentage of its original price. This is due to the fact that the van is no longer considered “new” once it leaves the dealership, even if it has only been driven a few miles.
- First-Year Depreciation: The most significant depreciation usually occurs within the first year of ownership. This is because a new van loses value quickly as it transitions from a new vehicle to a used one.
Depreciation of Used Vans
- Slower Depreciation: Used vans have already undergone their most significant depreciation. As a result, their rate of depreciation tends to be slower compared to new vans. This can make used vans a more stable investment if you’re concerned about value loss.
- Factors Affecting Depreciation: The rate of depreciation for used vans can still be influenced by factors such as age, mileage, condition, brand reputation, and market demand. However, the initial steep drop has already occurred.
Finance Considerations
- Choosing Between New and Used: If you’re particularly concerned about depreciation and want to minimise the impact, opting for a used van can be a wise choice. Used vans are often more affordable and depreciate at a slower rate, which may help preserve their value better over time.
- Financial Planning: Whether you’re considering a new or used van, it’s important to plan your finances carefully. If you’re worried about depreciation impacting your investment, used vans generally offer better value for money in terms of holding their value.
Haven’t found the van of your dreams? No problem! At We Finance Any Van, we have hundreds of thousands of pre-loved vehicles to explore. Simply pop on over to our van search portal and we will help you with the rest.
Will being in negative equity impact my credit score?
Being in negative equity (where the value of the van is less than the outstanding loan balance) itself does not directly impact your credit score. However, if negative equity leads to consistently missed loan payments or financial difficulties, this can harm your credit rating.
If you are being held back by your credit score, we offer a flexible bad credit van finance service. We work with a panel of specialist lenders to try and bag you the best deal on the market, regardless of your financial circumstances.
We want you to enjoy a smooth loan term and would always recommend reviewing your budget before you sign any finance deal. Using our free van finance calculator, you can get a rough view of what your monthly payments will look like and determine whether the loan is affordable.
If you are unsure where to begin, our friendly team are always on hand to answer any questions or queries you may have. Get in touch now.
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If you are looking for van finance, you are in the right place!
We have years of experience in van finance, a very extensive lending panel & a team set up to get you the van you want at the best finance rate possible. If you have already found a van and just need the finance – great! If you need help finding a van then we are there for you as well – in fact, we have access to over 100,000 vans.
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