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Topic starter
19/06/2012 5:28 pm
I wonder if you could clarify when and when not a business vehicle, in my case a light van, would fall within a Trust Deed arrangement and the implications of having such a vehicle. As I see it there are a few ways of "owning" or "having the use of" a vehicle for business:
1. Bought outright for cash.
2. Bought with a bank loan.
3. Bought with "finance" i.e. a loan from the finace company used by the dealer.
4. Hire Purchase (HP)
5. Vehicle Lease Arrangement
6. Contract Hire
I dont really know the ins and outs of all these arrangements but other than buying it outright, (which would make it an asset?), all the other ways would produce a monthly payment requirement for an agreed period of time.
What would the effect be of starting a TD arrangement?
I appreciate there is a lot of questions there but any comment would be very useful. many thanks....
19/06/2012 5:51 pm
Hi Buz.
1 - If you buy a vehicle with cash, or an unsecured bank loan, you own it.
2 - If you lease or hire a vehicle you don't own it.
3 - If you have a vehicle on Hire Purchase (sometimes described as being "finance") you don't own it, but you may at some point in the future (it could become an asset).
In scenario 1 a vehicle worth more than £3000 will likely be an asset in a trust deed (and if there was no real need for the vehicle it might be an asset if valued at a lower figure).
In scenario 2 you can only keep the vehicle if you make the payments. If you rely on the vehicle for your work, and the cost is reasonable, it's likely that the trustee will allow you to carry on with the payments.
In scenario 3 it really depends upon when the HP ends and what the vehicle would be worth. Like in scenario 2, if the vehicle is needed and the cost reasonable you'll likely be able to budget to carry on with the payments.
What's your situation?
Qualified Debt Adviser & Forum Administrator - Ask me anything about Trust Deeds 
Topic starter
19/06/2012 6:11 pm
Thanks TDA very helpful. I own my van outright but mileage is getting higher and higher on it and it will need replaced within the next few years as a reliable van is curucial to my business and generating my total income. My dilemma is that I am doubtful I will be able to get an HP or finance deal anyway!!
19/06/2012 6:29 pm
Hi Buz.
I appreciate that getting finance presents a further challenge. If you rely on the van it certainly makes sense to try to ensure that you have one which has a good chance of getting you through the period of a debt solution.
Qualified Debt Adviser & Forum Administrator - Ask me anything about Trust Deeds
Topic starter
19/06/2012 6:56 pm
That was my thoughts TDA I need to do some planning to ensure that I can fulfill my business obligations to my clients and keep an income flow over the medium term also. Thanks for your comments its a big help.
