Bought Privately, Hired Out, and Funded in a Week

A short term property rental business came to us wanting to add a camper van to what it lets out. They already ran holiday accommodation and had decided a van listed on a specialist hire portal would work alongside it.

They had found a 2018 conversion being sold privately by someone who had been renting it out themselves and had stopped. What they had not found was anybody willing to fund it.

For how finance works on these vehicles generally, see our guide to campervan finance.

The obvious lenders were the wrong lenders

This is the part worth understanding, because it is where most people in this position get stuck.

If you are buying a camper van, the natural place to look is the leisure finance market. Those lenders know the vehicles, they understand values, and they advertise everywhere.

They were also never going to fund this deal, for two separate reasons.

Most leisure lenders want a minimum of three years trading history. This business had two and a half. That alone was enough for several of them.

The second reason matters more, and it catches people out completely. Leisure lenders generally fund vehicles for the owner's private use. They do not fund vehicles being put out for hire or reward, which is exactly what a rental camper van is. It is not a question of the rate or the deposit. The use case sits outside what those lenders do at all.

So the answer was not to keep working the leisure market harder. It was to stop looking there and go to a commercial lender instead, one that funds business assets and is comfortable with a vehicle that earns its living being hired out.

Then the private sale

Having found the right kind of lender, the next obstacle was the seller.

Plenty of lenders will not fund a private purchase at all, and the reason is title. When a dealer sells you a vehicle, the lender is dealing with a VAT registered business with an audit trail. When a private individual sells you one, the lender is sending a substantial sum to somebody they know nothing about, on the strength of a document that does not prove what most people assume it proves.

A V5C shows the registered keeper. It does not show the owner. Those are two different things, and a lender releasing funds against a V5C alone has no protection if the vehicle turns out to be subject to outstanding finance or to belong to someone else.

What the lender needs is the seller's original invoice or bill of sale from when they bought it, evidence that the invoice was paid, and photo identification confirming the seller is the person named on the V5C and on that invoice.

Rather than leave our customer to ask a stranger for his identification and bank details, we dealt with the seller directly. We spoke to him, explained exactly what was needed and why, and collected everything from him ourselves. He was glad not to have to send personal documents to a buyer he had only just met, and the buyer never had to handle them.

That is usually the point where private sales fall apart when people try to arrange them alone. The buyer does not know what to ask for and the seller does not want to hand it over.

The conditions that came with approval

Because the vehicle is being hired out rather than used by the business itself, the approval came with conditions. They are worth knowing about if you are planning something similar, because none of them are difficult but all of them have to be satisfied before funds are released.

Insurance had to cover secondary rental. That is not the same as ordinary business vehicle cover, and a policy that does not specifically allow sub-hire will not satisfy the lender.

A sub-hire agreement had to be in place, which the hire portal provided as part of how it operates.

And no single hire could exceed ninety days. That one sounds more restrictive than it is. It does not stop anyone hiring the van for longer, it simply means a fresh agreement is signed for each ninety day period. A short email confirming they understood and would work to it was all the lender wanted.

The outcome

Approved and completed within a week, on a twenty per cent deposit over a five year term, at a monthly payment the business was comfortable with.

The van is now earning alongside their existing holiday accommodation, and they are watching how it performs over the season with a view to adding more vehicles in the new year. They left us a glowing review, which we appreciated.

Handled by Roland Tedder

Can I get finance on a camper van I intend to rent out?

Often yes, but probably not from a leisure finance lender. Most leisure lenders fund vehicles for private use and will not fund hire or reward, which is what a rental vehicle is. The route that works is commercial asset finance, from a lender comfortable with a vehicle that earns its living. Expect conditions: insurance covering secondary rental, a sub-hire agreement, and usually a cap on the length of any single hire.

My business has been trading less than three years. Is that a problem?

It is for a lot of leisure lenders, who commonly want three years as a minimum. It is far less of an issue on the commercial side, where the assessment looks at trading conduct, cash reserves and what the asset will earn rather than applying a fixed age rule. This business had two and a half years behind it and was funded without difficulty.

Can I buy a vehicle from a private seller on finance?

Often yes, though many lenders will not consider it. What makes it workable is proof of title, meaning the seller's original purchase invoice, evidence it was paid, and identification matching the name on the V5C. A V5C alone is not enough, because it shows the registered keeper rather than the owner. Tell us before you commit and we will speak to the seller ourselves, which is usually easier for everybody.

What insurance do I need if I am hiring the vehicle out?

Cover that specifically permits secondary rental or sub-hire. Ordinary business vehicle insurance will not do, and a lender will not release funds without seeing a policy that allows the vehicle to be hired to third parties. Sort it early, because it is a common cause of delay right at the end of a deal.

Every application is assessed on its own merits and terms depend on individual circumstances.

Talk to us about your business

A private sale, an unusual asset, or a vehicle you intend to hire out. Tell us what you have found and we will tell you honestly what is achievable. No obligation, no upfront fees.

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