Finance Your Vehicle

Finance Your Vehicle

Make Your Van Purchase More Affordable

We appreciate that investing in a new or used commercial vehicle is a big decision, which is why here at A.M. Phillip Trucktech, we understand that many businesses will choose to finance their truck or van to secure the best value possible. We offer our customers a range of flexible finance options to suit your specific needs and budget - read on to find out more about our commercial vehicle financing solutions… 

How Does Van Finance Work?

Van finance works similarly to car finance but with some specific considerations for commercial vehicles, making the options more tailor-made towards vans. Most finance agreements require an initial deposit (usually at least 10% of the van's value) followed by monthly instalments across a pre-agreed period of time. 

Depending on the type of van finance you opt for, you can either choose to make a final payment at the end of the contract to own the vehicle, return it to the lender and begin a new agreement, or choose to part-exchange the van for a newer model by entering a fresh contract. 

It’s important to understand that lenders will perform an initial credit check to assess your creditworthiness first before deciding whether to accept or reject your application. Based on your current credit score and previous credit history, a lender will be able to confirm the type of finance they can offer and at what interest rate.    

Van finance agreements typically range between two to five years and there are options for no deposit deals and chances for those with bad credit to apply too. Bear in mind that some finance agreements may have mileage restrictions and modification limitations, while others may include maintenance packages to save you the hassle of organising the annual services separately.   

Types of Van Finance

In the UK, there are several types of van finance options available to commercial vehicle customers. The main types available are:

Personal Contract Purchase (PCP) Van Finance

Personal Contract Purchase (PCP) for vans works by you paying an initial deposit to secure the vehicle (the higher the deposit, the lower your monthly payments) when you agree to make fixed monthly repayments over an agreed term - usually two to four years. 

At the start of the agreement, the finance company will determine what’s called a Guaranteed Future Value (GFV), also known as a ‘balloon payment’ or ‘optional final payment’, which will estimate what the van will be worth at the end of the term. Following this you can either pay the owed balloon payment to own the van outright, return the van to the finance company with nothing more to pay, or use any equity as a deposit on a new PCP agreement.

If you want to change your van regularly and make lower monthly payments, then PCP van finance could be an ideal solution. 

Hire Purchase (HP) Van Finance

Hire Purchase (HP) for vans works by you paying an initial deposit to secure the vehicle which the lender purchases on your behalf and loans to you until the owed amount is repaid over a fixed term, usually two to five years. The payments you make cover the cost of the van, plus interest, and during an HP agreement, the finance company owns the van until the final payment is made. 

Unlike some other finance options, HP typically doesn't impose mileage limits but you are responsible for maintaining and insuring the van throughout the agreement. It may be possible to make early repayment should you wish, which will shorten the duration of your contract and reduce the total amount of interest paid back to the lender. 

If you want to eventually own the van and don’t want to make a large final payment at the end of the contract, then HP van finance could be the better option for you. 

Lease Purchase (HP) Van Finance

Lease Purchase (LP) for vans works by combining elements of both leasing and purchasing. Like with other forms of finance, you pay an initial deposit to secure the vehicle and make fixed monthly payments over an agreed term typically ranging from two to five years. There is no option to hand the van back at the end of the agreement, instead, you will need to pay a final ‘balloon payment’ to eventually own the vehicle. 

Bear in mind that interest is charged on the total amount borrowed, including the balloon payment. LP can be an attractive option for businesses that want to make lower monthly payments than Hire Purchase but still intend to own the van eventually. It's particularly suitable if you want to spread the cost of the van over a longer period, including a significant portion at the end of the term.

Personal Contract Hire (PCH) Van Finance

Personal Contract Hire (PCH) for vans, also known as personal leasing, works by allowing individuals or businesses to use a van for a fixed period without ever owning it. Usually, you’ll make an initial payment (often the equivalent of three to nine months worth of the regular monthly payments), although because this is not classed as a deposit, you won’t get it back at the end. Instead, the amount paid upfront will determine the ongoing monthly payment amount.  

The repayments you make cover the van's depreciation over the contract period which typically lasts between two to four years, but can have the flexibility to become longer or shorter. You’ll need to agree to an annual mileage limit at the start of the contract and exceeding the pre-agreed limit will result in additional charges at the end of the term. Bear in mind that you won’t ever own the van (or have the opportunity to) as essentially you are renting it on a long-term basis. At the end, you simply hand it back to the lender. 

PCH can be a suitable option if you want to drive a new van every few years, prefer fixed monthly costs, and don't want to worry about depreciation or selling the vehicle at the end of the term. It's particularly suitable for those who don't want the responsibility of ownership and are comfortable with not having an asset at the end of the agreement.

Why choose A.M. Phillip Trucktech to finance your van?

We are committed to providing our customers with the best possible service. Whether that’s selling a new or used van, performing servicing and maintenance, or providing aftersales support in the form of finance solutions. We pledge to: 

  • Provide personalised guidance from our finance experts
  • Be transparent when explaining all your financing options
  • Give you access to our latest special offers and promotions on our range of vehicles
  • Support you in understanding the tax implications of van finance for your business  

Our welcoming dealerships across Scotland are located in Forfar, Edinburgh, Glenrothes, Conon Bridge, and Dundee, and are staffed with knowledgeable commercial vehicle experts ready to assist you. We are committed to securing you the best value for your investment, so we'll talk you through each financing solution, helping you make an informed decision that aligns with your business goals.

Frequently Asked Questions About Van Finance

We hope our commercial vehicle finance page has helped you understand more about your options. If you’d like to know more, below we’ve shared the questions we get asked the most about van finance and have provided you with some helpful answers. Should you have any other questions, please feel free to get in touch with us. 

What credit score do I need for van finance?

The credit score required for van finance can vary depending on the lender and the specific type of finance you're applying for. Credit scores in the UK range from 0-999 and most lenders will be looking for a good credit score.

To give you approximate figures, an excellent credit score is usually around the 800+ mark, a good credit score is usually between 670-799, a fair credit score is around 580-669, and a poor credit score usually falls below 580.  

Can I get a van on finance with bad credit?

Yes, it is possible to get a van on finance with bad credit, although it may be more challenging and potentially more expensive than for those with good credit. Some lenders specialise in providing finance to individuals or businesses with poor credit histories, although you’re likely to face higher interest rates to offset the increased risk for the lender.

It may also be the case that you’re required to put down a larger initial deposit to secure the finance and you may have fewer choices in terms of finance products and vehicles. To secure van finance with bad credit or poor credit history, it may be possible to involve a guarantor to secure the loan for you. 

Do I need to pay a deposit for van finance?

Whether you need to pay a deposit for van finance depends on several factors, including the type of finance agreement, the lender's policies, and your personal financial circumstances.

In most cases, a deposit of between 10-20% of the van’s value is usually required, although some lenders may offer no-deposit options, especially for those with excellent credit scores. Bear in mind that by not paying a deposit, your monthly repayments will be much higher.  

Can I claim van finance as an expense?

The ability to claim van finance as an expense depends on how you use the van, your business structure, and the type of finance you’ve agreed to. For sole traders, if the van is used exclusively for business you can claim the full cost of finance payments as a business expense.

If the van is used for both business and personal use then you can only claim the business portion of the finance costs and you’ll need to keep accurate records of the business and personal mileage.

For limited companies who own the van, the company can claim the full finance costs as a business expense. However, if it's a company van used personally by an employee then the company can still claim the costs, but the employee may face a benefit-in-kind (BIK) tax.

Can I sell my van if it’s on finance?

Once you have made all your repayments to the lender and have a finance agreement that enables you to keep the van, you are well within your rights to sell it. However, if you are still paying for the van, then selling it won’t necessarily be possible.

Some agreements may have restrictions on selling the vehicle before the finance is settled and there may be early repayment charges if you wish to settle the bill. We recommend you contact the finance company to get an up-to-date settlement figure first and check what the early repayment fees are.

If the van is worth more than the settlement figure, you have positive equity but if it's worth less, you're in negative equity and will need to make up the difference. Most lenders will expect you to have paid back at least 50% of the van’s value before agreeing for you to settle the outstanding amount. 

Can I give my van back to the finance company?

Yes, in some cases you can return your van to the finance company, but the process and consequences depend on your specific finance agreement and individual circumstances. Known as ‘voluntary termination’, you may be able to return the van if you've paid at least 50% of the total amount payable and you won't owe any more money, even if the van is worth less than the remaining finance.

If you haven’t paid 50% of the total amount, you’ll still be liable for the outstanding balance after the van is sold and it can negatively impact your credit score - this process is known as ‘voluntary surrender’. 

How do I get my finance settlement figure?

A finance settlement figure, also known as a payoff amount or early settlement amount, is the total sum required to completely pay off your finance agreement before the end of its original term. If you secured your vehicle’s finance through us, then you can contact a member of our sales team who can obtain your settlement figure for you. Otherwise, you’ll need to contact the lender directly.  

Who can I speak to about financing my van?

When you purchase a commercial vehicle from us here at A.M. Phillip Trucktech, we will be happy to discuss your finance options. We have access to favourable finance rates for trucks and vans, and our sales team is here to answer all your financing questions. Contact us via email or phone, and we'll be happy to assist you.

Get in Touch

At A.M. Phillip Trucktech, we're dedicated to finding the right financing solution for your business. Let us help you keep your fleet running smoothly with a finance package tailored to your needs. Are you ready to explore your financing options? Contact our sales team today by calling us directly or by using the form below to send us an enquiry. 

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