Putting the finance in place

This paper describes the financing options that are available to bus and coach operators in the UK. Finance leases have proved popular among coach operators as they do not have to find the Value Added Tax up front. Some companies ask for sale and leaseback deals on existing vehicles. Most firms use hire purchase, as once they have made all of their payments, the vehicle is theirs. Repayments are generally made over 48 months and customers usually put down 10-20% of the asking price as a deposit. In the case of sole-traders or partnerships, the finance house will require information on the personal circumstances. For a limited company, personal guarantees may be required from the directors. There has been a decline in the numbers of local finance company branches and financial reps, with a move to computerisation. Companies competing for bus and coach businesses include Alliance and Leicester, Close Asset, Hansar Finance and Volvo Financial Services. Contract hire is also used, but at the end of the payment period the operator does not own the vehicle, which is returned to the lessor. Contract hire can be combined with a maintenance agreement. Hansar Finance has introduced Choices, which works in a similar way to hire purchase but the value of the vehicle is built into the contract, reducing monthly payments. When the agreement expires, the customer can return the vehicle, keep it and pay the agreed future value, or refinance it under a new agreement.

• Authors:
  • BANNER, S
• Publication Date: 2005-3-4

Language

• English

Media Info

• Pagination: 22,24-6
• Serial:
  • BUS AND COACH PROFESSIONAL
  • Issue Number: 99
  • Publisher: PLUM PUBLISHING LTD

Subject/Index Terms

• TRT Terms: Buses; Costs; Economics; Financing; Leasing
• Geographic Terms: United Kingdom
• ITRD Terms: 1272: Bus; 1271: Coach; 224: Cost; 255: Economics; 244: Financing; 228: Leasing; 8119: United Kingdom
• Subject Areas: Economics; Finance; Public Transportation; Vehicles and Equipment; I10: Economics and Administration; I90: Vehicles;

Filing Info

• Accession Number: 01030395
• Record Type: Publication
• Source Agency: Transport Research Laboratory
• Files: ITRD
• Created Date: Aug 7 2006 1:35PM