According to the RAC Foundation, in 2018 92,096 cars were sold to businesses that run fleets of up to 24 vehicles and a further 1,222,849 were sold to companies with fleets of more than 24 cars.

That is just cars. The latest figures from the Society of Motor Manufacturers and Traders (SMMT) indicate that an additional 41,478 vans and Light Commercial Vehicles (LCVs) were also first-registered in 2018, along with 43,103 Heavy Goods Vehicles (HGVs) and 7,236 buses and coaches.

The vast majority of this entire group of vehicles require some form of commercial vehicle finance – so let’s look at some of the most frequently asked questions on the subject.

Can commercial vehicle finance be arranged for both private individuals and companies?

Yes, it does not matter whether you are a private individual, a sole trader, partnership or limited liability company, commercial vehicle finance is available to all types of applicant.

What types of finance are available for commercial vehicles?

Probably the most common forms of commercial vehicle finance are:

  • lease purchase – which is, just as the term suggests, a combination of a lease, in the initial stages, but, with a final “balloon” payment (reflecting the age, mileage and residual value of the vehicle), its ownership is ultimately transferred to the buyer;
  • Personal Contract Purchase (PCP) – an increasingly popular form of finance for private cars, PCPs may also be used to purchase commercial vehicles and involve reduced repayment instalments throughout the contract and the option to buy (on payment of a final “balloon” payment, equivalent to the vehicle’s Guaranteed Minimum Future Value) or simply hand it back to the finance company; or
  • hire purchase – after payment of an initial deposit (typically some 10% of the vehicle’s value), there follows the payment of equal monthly instalments and the possible payment of a final balloon payment, before ownership passes from the finance company to the new owner.

What types of vehicle are suitable for commercial vehicle finance?

From curtain siders to dropside trucks, from tankers to refrigerated lorries, from tippers to tractor units, there is a seemingly endless list of commercial vehicle types – and it is possible to arrange commercial vehicle finance on any of them.

Whether you are looking for finance for a new or used commercial vehicle your budget is likely to be determined by answers to a few simple questions:

  • the price of the vehicle;
  • the period over which you intend to repay the finance;
  • the amount of deposit you have available;
  • the annual mileage you expect of the vehicle; and
  • a broad assessment of your current credit rating – excellent, good or fair.

Is commercial vehicle finance available for both single vehicles and vehicle fleets?

Yes – whether you are looking for finance for a single commercial vehicle or a whole fleet of cars for your business, commercial vehicle finance is available – subject to your credit status and the affordability of the borrowing, of course.

How quickly is the borrowing likely to be arranged?

Once you have answered a few simple questions, a decision in principle on your proposed borrowing is typically delivered quickly – and that decision in principle makes success in your formal application that much more likely, so avoiding the kind of rejection which adversely affects your credit rating.

If your formal application is then approved, the funds may be transferred directly to the dealer in question – leaving you only to take delivery at a convenient time.