Used Commercial Vehicle Finance

Used commercial vehicle finance is business funding for second hand vehicles bought for commercial use, arranged in the same way as finance on a new vehicle. What differs is the assessment. Because the agreement is secured against the vehicle, the lender looks at how much value and working life is left in it, which is why age, mileage, condition and any converted body affect the term available and the deposit required.

Most commercial vehicles on UK roads were bought second hand, and for good reason. Somebody else has taken the first and steepest hit of depreciation, and what is left is a working asset with years in it at a fraction of the new price.

The finance is straightforward. The questions that come up are about the vehicle rather than the funding, and they are different questions depending on what you are buying.

What counts as a commercial vehicle

More than most people assume. Vans are the obvious answer, but the term covers a lot of ground.

Tippers and dropsides. Luton vans and box bodies with tail lifts. Crew cabs. Pickups. Minibuses and passenger vehicles. Flatbeds. Refrigerated vehicles. Vehicles with cranes mounted on them. Campervans and motorhomes bought through a business. And heavier vehicles above 3.5 tonnes, including 7.5 tonne lorries.

We arrange finance on all of it, new and used. If you are looking at machinery or plant rather than a vehicle, that is a different conversation but often still one we can help with, so it is worth asking.

For used vans specifically, our used van finance page covers age, mileage and condition in detail. This page is about everything else.

Age and value, and why the answer changes by vehicle

There is one underlying rule. The vehicle has to have enough value and enough working life left in it to secure the agreement over the term you want. Beyond that, how far you can push it depends entirely on what you are buying, because different vehicles hold their value in very different ways.

As a general guide, past ten years old or 100,000 miles the pool of lenders narrows, the term shortens and the rate moves up. That is a starting point rather than a wall. A well maintained vehicle from a recognised manufacturer with a complete service history is fundable a good deal later than people expect, and we work with lenders who will finance a ten year old vehicle for a further two or three years where the rest of the picture supports it.

Send us the details of anything you are considering and we will tell you what term and deposit are realistic on it before you commit.

Converted bodies on used vehicles

This is where used commercial vehicle finance most often goes wrong elsewhere, and it is worth understanding before you buy.

A tipper, a Luton, an arb tipper with a cage, a flatbed with a crane, a refrigerated body. None of these were sold complete by a manufacturer. Each is a chassis cab with a body built onto it by a specialist converter, and on a used vehicle the conversion is frequently worth more, proportionally, than it was when new, because the chassis has depreciated and a well built body has not.

Price guides do not know that. They value the base vehicle. So a lender running a standard valuation on a used tipper sees a used chassis cab, offers accordingly, and the buyer is asked for a deposit to bridge a gap that exists only because nobody explained what is being bought.

We put the case properly. Who built the body, what it is, what condition it is in and what it is genuinely worth, alongside the invoice. Where the conversion was carried out by a recognised builder, the finished vehicle is what we ask the lender to fund.

If you are buying a converted vehicle second hand, send us the specification and tell us who built the body.

Ex-fleet and ex-lease vehicles

A large share of good used commercial vehicles come out of fleets and leasing companies at three or four years old, and they are frequently the best buys on the market.

Fleet vehicles are serviced on schedule because a maintenance contract requires it, so the history is usually complete and verifiable. They are often higher mileage than a comparable trade-owned vehicle, but the miles tend to be motorway miles rather than short stop-start work, which is easier on a vehicle than the numbers suggest.

Lenders are comfortable with ex-fleet stock for the same reason buyers should be. The documentation is there. Where an ex-fleet vehicle carries a manufacturer or fleet service record, it is worth having that to hand when you apply, because it does a lot of the work.

Buying privately from another business

Plenty of used commercial vehicles change hands directly between businesses, and the prices reflect the absence of a forecourt.

Many lenders will not consider a private purchase at all. We can, provided the seller can demonstrate they own the vehicle outright and have clear title to it. We are happy to speak to them directly about what the lender needs to see, which is usually the part that stalls these deals when people try to arrange them alone.

Tell us before you commit. It is normally workable, and the saving against dealer pricing is often substantial.

Heavier used vehicles

The used market above 3.5 tonnes works to different rules, and it is worth knowing them before you buy.

Vehicles over 3.5 tonnes are annually tested and plated rather than MOT'd in the ordinary sense, so the test history and plating certificate matter more than the age on the registration document. A well kept vehicle with a clean test record is a far better proposition than a younger one with a difficult history.

Two things to confirm, neither of which affects the finance. Drivers who passed their car test on or after 1 January 1997 need C1 entitlement for vehicles between 3.5 and 7.5 tonnes, and C for anything heavier, each requiring an additional test. And a goods vehicle operator's licence is generally required for vehicles over 3.5 tonnes used in connection with a business. Both are worth checking on gov.uk before buying something the business cannot yet legally run.

We arrange finance on used vehicles well beyond 3.5 tonnes, including 7.5 tonne flatbeds and vehicles with cranes mounted on them. Tell us what you have found.

What we can arrange that a dealer cannot

Dealer finance is convenient and sometimes the rate is genuinely competitive. What it rarely includes is any of the following.

Funding for the completed converted vehicle

A dealer's finance desk works to the guide price of the base vehicle. We work with lenders who value the body, the tail lift or the crane alongside it, so the vehicle is funded for what it actually is.

Finance on a private purchase

Most dealer finance only exists to fund the vehicle on their own forecourt. If you have found something being sold by another business, they are no help at all.

VAT deferral

Where VAT is charged, on qualifying agreements the lender pays the seller the full price including the VAT, then collects the VAT element from your business as a single payment after an agreed period, usually around three months, giving you time to reclaim it from HMRC first. There is no charge for the facility. Worth knowing that many used commercial vehicles are sold under the margin scheme with no VAT on them at all, and our guide to why some vans have VAT and some do not explains what that means for the price.

Little or no deposit

Dealers commonly ask for 10 to 20 per cent down. For a VAT-registered limited company with a reasonable credit profile buying at a sensible market price, no deposit at all is a normal outcome with us.

Who can apply

Limited companies can borrow from £10,000. Sole traders can borrow from £25,000, on unregulated credit agreements, because the lenders we work with offer commercial finance only.

New limited companies and businesses under two years old are welcome to apply, and so are businesses with a difficult credit history. Our new business van finance page and our bad credit van finance page set out what lenders look for in each case.