Buying a horsebox or trailer is a large investment and there are many things to consider to ensure your horse is happy and healthy when they’re on the move. In this guest blog from Kingsgate finance we explore the process and options for financing a horsebox or trailer.
Why would I use Horsebox Finance?
To transport horse safely and comfortably of course, but let’s delve a little deeper as we discover what horsebox finance is and how it works.
Some people will use it in business to make money and transport horses. Paying a small monthly fee instead of a large cash lump sum will mean the horsebox should be profitable from day one as you can match your income to your outgoings, this is called return on investment.
Others would rather have their own horsebox for personal use and if you do a lot of transporting it could save you money instead of paying a transportation company.
The most common reason is that you can pay a small monthly amount for a much newer and better quality horsebox thus having peace of mind and more reliability.
A horsebox is a considerable investment for an individual or a business and great care should be taken when deciding how you can pay for it.
Where do I find a Horsebox For Sale?
We recommend ensuring that you know the service history of the vehicle, who built it (the original manufacturer), what brand the chassis is and if possible, who the previous owners were.
Read some of our other articles on top tips to purchase a horsebox and what to take when travelling in a motor home or horsebox.
You can purchase from a dealer or an individual.
What type of Horsebox can you finance?
You can finance all sizes from a 3.5t horsebox to the larger 26-tonne boxes with the capacity to provide overnight accommodation for several people.
You can also finance the smaller trailers used to accommodate one horse that is hitched on to the tow bar of a vehicle.
It is possible to finance on any age of horsebox from used to new even if they are 15 years old.
Who can get Horsebox Finance?
Anyone is the short answer from individuals and businesses even financing those with bad credit or any of the below;
- not showing at home address
- non homeowner
- bad credit
What types of finance are available?
- Hire Purchase
This type of agreement means that the horsebox is on your balance sheet if you are a business and becomes an asset. If you are an individual it also becomes an asset and you can claim writing down allowances on the asset against your taxable profits.
Vat is paid upfront and you own the horsebox immediately.
- Finance Lease
Vat is paid monthly, if you are a business this can be advantageous as it means you don't have to pay the vat all at once. The horsebox becomes an asset but you only offset the interest element of the monthly payment against tax not the value of the horsebox.
At the end of the agreement, you must sell the horsebox to a third party and pay the finance company a % of the sales proceeds. This would mean that if you sold the horsebox for £100 and the sales proceeds were 10% you pay them £10.
- Operating Lease
An operating lease will have a residual value, this is an estimated value given to the horsebox at the end of the term.
So a 7 year agreement means that after 7 years they have estimated the horsebox to be worth X. X could be 40-50% depending on the age and specification of the horsebox
The monthly payments are offset against tax.
This means that if you made £30,000 profit and paid £10,000 in operating lease payments you would only pay tax on the net £20,000.
At the end of the agreement, you can usually refinance the residual or balloon payment or trade the horsebox in and settle the balloon payment before entering into a new agreement
A straightforward loan will mean an amount of money is paid to you to then pay for the horsebox
How long can I finance?
Anything between 12 months and ten years although it will depend on the age of the vehicle.
Do I need a deposit?
On Hire Purchase agreements you need to pay at least the VAT and some lenders ask for a 10% deposit, however some do not.
If you are a business and wanted to lease a horsebox you would need to pay the vat upfront just a monthly payment, the monthly payments will have vat added on to them.
A part exchange would be classed as a deposit and will be shown on your supplier's invoice.
What information is required?
1. The registration mark of the vehicle and the mileage specification, make and model should be supplied.
2. Your details will be required such as home address, date of birth, name of business if you have one.
Some financial information such as 3 months recent bank statements and accounts or tax returns.
3. You must be able to demonstrate affordability this means your bank statement will need to show you can afford
the monthly payments.
3. It could not be more straight-forward, your account manager should in touch every step of the way making sure everything runs smoothly.
Article supplied by Kingsgate Finance Ltd