What is the criteria for a Novation?
- The contract must be transferring from one Limited Company to another Limited Company. Limited Companies include LTD, LLP and PLC.
- There is more than 12 months remaining on the contract.
- Both companies (existing and new customer) must be solvent.
- The contract type must remain the same.
- The current contractual agreement must not be in default.
- The address on the documentation for both existing and new customer must match the address on Companies House.
- Two signatures (2 Directors or 1 Director and 1 Company Secretary) from each company will be required.
- The new customer must have been credit approved before a Novation is requested.
Can anyone request a Novation quotation?
No because this option is not available with all funders. A Novation is at the discretion of the finance provider.
A Novation will also not be provided where:
- The vehicle has less than 12 months to run on the contract.
- The vehicle is in an extension
- The vehicle has outstanding debt
- The Novation agreement has not been completed in full.
- The customer goes into liquidation or administration while the process is being carried out. If this happens the Novation will be cancelled and the information passed to the finance provider's collection team.
For Insolvency Novations, please contact Nationwide Vehicle Contracts on 0345 811 9595 to discuss.
How much does a Novation cost?
The cost of a Novation varies from funder to funder. On average, the total cost is £400 excl. VAT subject to approval by the finance provider. This fee represents two costs:
- £200 (exc VAT) of which is paid to the finance provider for the administration of the Novation agreement.
- £200 (exc VAT) of which represents the costs incurred by Nationwide Vehicle Contracts for processing the arrangement on your behalf.
The £400 exc VAT fee is payable by debit or credit card or by BACs payment and and will be taken prior to finance proposal. This fee is payable even if you do not complete for any reason but does not apply if you fail to pass eligibility checks.