Sussex Asset Finance
Horsebox & Equine Equipment Finance
As horse owners ourselves, we have a rare insight into this specialist world and can advise you with the benefit of first hand experience.
A horsebox will probably be your biggest financial outlay so you’ll need unbiased, straightforward advice. Whether you’re buying from a dealer or from a private individual, we’ll help you source the right size and specification at a monthly rate you can afford. It’s worth remembering that some lenders only finance boxes and trailers up to 10 years old but our long experience in this sector means we know exactly where to go to find you funding for an older model.
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Hire Purchase or Lease Purchase – what is the difference?
How hire purchase works
Usually, you’ll first need to put down a deposit on the horsebox you want to buy. For most hire purchase agreements this will be 10% or more of the vehicle’s value.
The rest of the value of the horsebox will then be paid off in installments over a period of 12 to 60 months (one to five years).
The loan is secured against the horsebox, which is why you can’t own it until you’ve made your last payment, including paying the Option to Purchase fee.
Make sure you understand the terms and conditions of your loan before signing the contract. For example, once all repayments have been made you pay a final fee, known as the ‘Option to Purchase’ – once you’ve paid this you’ll own the horsebox. This is typically £100–£200, but it does vary so ask how much it will be.
Pros of hire purchase
- Flexible repayment terms (from one to five years) to help fit in with your monthly budget – but the longer the term the more you’ll pay in interest.
- Relatively low deposit required (normally 10% of the car’s price).
- Fixed interest rates so you know exactly what you’re paying every month for the length of the term.
- Once you’ve paid half the cost of the horsebox, you might be able to return it and not have to make any more payments.
- It doesn’t usually come with mileage restrictions.
- You don’t need to find a large sum to purchase the horsebox like you would with a Lease Purchase agreement.
Cons of hire purchase
- You don’t own the horsebox until you’ve made your final payment, which means if you get into financial difficulties the finance company could take it away.
- Monthly payments are usually higher than for Lease Purchase agreement
- Your deposit and term length will affect your monthly payments. Your monthly payments are likely to be higher the smaller the deposit is and the shorter the term of the loan.
- Until you’ve paid a third of the total amount payable, the lender can repossess the car without a court order.
- It can be an expensive route if you only want a short-term agreement.
How lease purchase works
This is very similar to a hire purchase agreement, the only real difference is that with a lease purchase you have a larger payment at the end of the agreement. This is usually referred to as a balloon payment. It is a way of keeping the monthly payments lower and more affordable.
At the end of the agreement when the balloon payment is due, you have a few options:
a. Keep the horsebox and pay the balloon an option to purchase fee, you will then own the horsebox outright.
b. Keep the horsebox and refinance the balloon over another few years
c. Sell the horsebox and settle the finance in full, then finance a newer box if needed.
Pros of lease purchase
- Monthly payments are lower than with a hire purchase agreement
Cons of lease purchase
- You may not reach the half paid amount (mentioned in the hire purchase section) until the end of the finance agreement, dependent on the size of the balloon amount. Meaning you wouldn’t be able to hand the horsebox back and walk away with no further payments until this amount has been paid.
- You will pay interest on the balloon payment for the whole of the agreement, meaning the interest charges will be higher.
- You will need to find the funds for the final balloon payment if you wish to keep the horsebox, or you will need to extend the finance over a longer period.
- You may be restricted on your annual mileage