Van finance
Van finance lets a UK business spread the cost of a new or used commercial van over its working life rather than paying cash up front. The three routes are hire purchase, where you own the van at the end of the term, finance lease, where you use the van and account for it on your balance sheet, and contract hire, where you run the van for a fixed period and hand it back. Because the van itself acts as the lender security, approval tends to be cleaner than an unsecured term loan, and personal guarantee requirements are usually lighter. It is the most common UK asset finance product by volume, so a wide panel of specialist lenders and manufacturer finance arms compete on rate, which works in the borrower favour. New trades, sole traders and limited companies that would struggle to get unsecured borrowing can often still qualify on a van deal.
At a glance
- Category
- Vehicles
- Typical tickets
- £8,000 to £80,000
- Typical term
- 24 to 60 months
- Best finance type
- Hire purchase (you own the van at end) or contract hire (you return it).
How financing van works
The lender either buys the van and hires it to you (HP and lease) or funds your purchase and registers an interest in the vehicle. You pay a deposit, then fixed monthly instalments. On hire purchase a small option-to-purchase fee transfers ownership at the end. On contract hire the lender keeps the residual risk and you simply return the van within the agreed mileage and condition. VAT-registered businesses can usually reclaim the VAT on a commercial van used for trade, which changes the effective cost meaningfully.
Typical terms
Most van deals run 24 to 60 months with a deposit between one and three monthly payments. Rates depend on credit profile, asset age and term, so a five-year-old used van sits higher than a new one. Always compare the total cost over the full term, not just the monthly figure.
Who it suits
Trades and mobile-service businesses that need a vehicle to earn, from construction subcontractors to plumbers, electricians, couriers and mobile beauty operators. Hire purchase suits those who want to keep the van long term; contract hire suits businesses that refresh the fleet every few years and want predictable costs.
What to check
- Whether VAT is recoverable on the vehicle, as commercial vans for trade use generally are.
- Mileage caps on contract hire, which can sting high-mileage trades with excess charges.
- Voluntary termination rights on regulated agreements, a useful escape valve if circumstances change.
- Maintenance and tyre cover, sometimes bundled and sometimes priced separately.
Why asset finance fits
The van itself is the security. PG requirements are softer than unsecured term loans. New trades and sole traders qualify where unsecured borrowing would not.
New to the structures? The guide to hire purchase, finance lease, operating lease and refinance explains how each route is taxed and accounted for, and the asset finance cost compare calculator puts them side by side on the same asset.
Top sectors
- Construction trades
- Mobile services (electricians, plumbers, gas)
- Delivery and courier
- Mobile beauty and pet services
Top UK lenders
- Aldermore Asset Finance
- Time Finance
- Specialist vehicle finance lenders
- Manufacturer finance arms (Mercedes-Benz Financial, Ford Credit)
Watch outs
- VAT-recoverable status affects the headline cost; commercial vehicles for trade use generally are.
- Mileage caps on contract hire can hurt high-mileage trades.
- Voluntary termination rights on regulated agreements are a useful escape valve.
Apply
Open van finance eligibility checker →Last reviewed: 2026-04-26.