Commercial Vehicle Finance for Transport & Haulage

Commercial vehicle finance is asset finance: the vehicle itself secures the agreement, which is why lenders can move faster and lend further than on an unsecured facility. For transport businesses the first real decision is hire purchase versus finance lease, and it is not just about preference.

Hire purchase means you own the vehicle at the end. You can claim the Annual Investment Allowance in year one, which matters if your accountant is managing your tax position carefully. The lender holds a first charge over the asset until the final payment clears.

Finance lease means the lender retains ownership. The vehicle stays off your balance sheet, which can help with covenant headroom if you have an existing term loan that restricts asset acquisition. Maintenance can be bundled in, though we have seen fleet operators assume bundled contracts are cheaper than they are, so we price both.

For fleet acquisitions the advance rate is typically 80 to 90 percent of the invoice price on new vehicles. Used HGVs at three to five years old still attract good appetite from specialist lenders, though the rate will be slightly higher to reflect residual value risk. Balloon payments are common on longer terms, reducing monthly outgoings in exchange for a lump sum or refinance at the end. That works well when your contracts give you forward visibility, but it is a commitment you need to plan for.

The lender who says yes to a 20-truck fleet for a regional haulier is rarely a high street bank. We place this type of deal with asset finance lenders who know what a Euro 6 curtainsider is worth in three years and price accordingly. Euro 6 compliance and ULEZ/CAZ restrictions are a live issue on route planning; some lenders will explicitly price a compliant vehicle against older diesel, and that spread has widened over the last two years.