Commercial Vehicle Finance UK

Commercial vehicle finance lets a business acquire the vehicles it needs without paying the full cost upfront, spreading it over a term that roughly matches how long the vehicle earns its keep. The vehicle itself is the security, so approval is often more achievable than an unsecured loan of the same size, and a deposit of 10% or so is common rather than the larger cash outlay an outright purchase demands.

The structure is the decision that matters most, and there are three main routes. Hire purchase spreads the price plus interest over the term and you own the vehicle outright at the end, which suits a business that wants to keep the asset and run it for years. A finance lease is a rental where you take the use and the risk of the vehicle, pay rentals over the term, and at the end either sell it as the lender's agent and keep most of the proceeds or continue on a peppercorn rental; it keeps more cash free early on. Contract hire is a fixed-term rental with maintenance often bundled in and the vehicle simply handed back at the end, which suits fleets that want predictable monthly costs and no disposal risk. A balloon payment can be set against hire purchase to lower the monthly figure, with a larger sum due at the end.

VAT treatment differs by route and by vehicle, and it is worth planning for. On hire purchase the VAT on the price is usually due upfront or with the asset, while on contract hire and finance lease the VAT falls on the rentals, which can help cash flow. Commercial vehicles used for business generally allow VAT recovery where cars often do not, but the detail depends on your position, so take your accountant's view.

What you can borrow and at what rate depends on the vehicle and your accounts. Lenders look at the age and type of the vehicle, its resale profile, your trading history and affordability. New and near-new vehicles from mainstream manufacturers attract keener terms than older or specialist kit, because the lender can value and resell them more easily. Indicative rates run widely, roughly 5% to 15% APR, with stronger businesses and cleaner assets at the lower end. We are a commercial finance broker, not a lender, so we do not set rates or decide applications; what we do is match your vehicle and your business to the asset-finance lenders whose appetite fits, and tell you which structure works before you commit.

If your requirement is sector-specific, we cover the detail on dedicated pages: transport and haulage, agriculture, construction, and wholesale and distribution each have their own funding quirks.