NICHE VEHICLE FUNDING
Part of the Niche Automotive Group
T: 0845 2020158
Embsay Mills Business Centre
What is a Balanced Payment Plan?
A Balanced Payment Plan offers a fixed monthly payment. However, unlike a Hire Purchase car finance agreement, where the interest rate is fixed, Balanced Payments offer a variable rate which tracks the changes in the Finance House Base Rate, LIBOR or Bank of England Base Rate, depending on what is specified in the agreement.
As the relevant rate goes up or down over the period of the contract, so does the amount of interest you pay.
How does Balanced Payment car finance work?
You pay an initial deposit and then the balance in fixed monthly instalments over an agreed term (24-60 months).
At the end of the term any variation in interest rates is reconciled and will be settled as either a credit to you, or a charge.
Other options available with a Balanced Payment Plan include a final ‘balloon’ payment which has the benefit of reducing your monthly payments by deferring an agreed element of capital until the end (traditionally linked with the depreciation of the vehicle).
What are the benefits of Balanced Payments?
Flexible – reducing interest penalty options for early settlement
Low deposit – doesn’t tie up cash reserves
Fixed monthly payment – perfect for budgeting
Tax benefits – Tax allowances for business users
Potential savings – save if interest rates fall
VAT free – no VAT on payments
What should I consider before using Balanced Payments?
No returns - You do not have the option to return the vehicle at the end of the agreement
Any increase in interest rates will mean you pay more under the agreement
The facility doesn’t offer the protection of the Consumer Credit Act
The minimum advance for an individual is £25,000, based on a business user declaration but any level is available for limited companies.
Commonly asked questions