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If you run a business that relies on commercial vehicles, you know how important it is to have a reliable and cost-effective fleet.
Whether you need semi-trucks, box trucks, light/medium duty trucks, pickups, trailers, construction equipment, or emergency vehicles, you have to consider how to finance or lease them.
Here, we will explore the different options available, the popular types of commercial vehicles you can buy on finance, and the benefits of using a finance broker to help you.
There are several ways you can finance your fleet of commercial vehicles, such as trucks, vans, buses, or construction equipment, depending on your business needs, budget, and credit rating. Here are some of the most common options:
Asset finance is a type of loan that is secured against the vehicles themselves. This means that if you fail to make the repayments, the lender can repossess the vehicles and sell them to recover their money. Asset finance usually offers lower interest rates and longer repayment terms than unsecured loans, as the lender has less risk. However, asset finance also means that you do not own the vehicles until you have paid off the loan in full, and you may have to pay a deposit upfront.
Hire purchase is a form of asset finance where you agree to pay a fixed monthly instalment for a set period of time, usually between 2 and 5 years. At the end of the term, you have the option to buy the vehicles outright by paying a final balloon payment, which is a large lump sum that covers the remaining value of the vehicles. Alternatively, you can return the vehicles to the lender and walk away, or trade them in for new ones and start a new agreement.
Hire purchase lets you own the vehicles later, but pay less each month. You only pay for the vehicles’ loss in value, not their total cost. But you also pay more interest and a big final payment, which can be hard to manage.
Lease purchase is similar to a hire purchase, except that you do not have the option to return the vehicles at the end of the term. You must either pay the final balloon payment and own the vehicles or trade them in for new ones and start a new agreement. Lease purchase is a good option for businesses that are sure that they want to own the vehicles at the end of the term, and do not mind paying more interest over the loan period.
However, a lease purchase also means that you are committed to paying the balloon payment, which can be a large amount of money.
Balanced payments are a type of asset finance where you pay a fixed monthly instalment for a set period, usually between 2 and 5 years. However, unlike hire purchase or lease purchase, there is no balloon payment at the end of the term. Instead, the monthly payments are calculated to cover the full value of the vehicles, plus interest, by the end of the term. This means that you own the vehicles outright once you have made the final payment.
Contract purchase is a type of asset finance where you pay a fixed monthly instalment for a set period of time, usually between 2 and 5 years. At the end of the term, you have the option to buy the vehicles outright by paying a final balloon payment, which is a predetermined amount that is based on the estimated residual value of the vehicles.
Alternatively, you can return the vehicles to the lender and walk away, or trade them in for new ones and start a new agreement.
(PCP) Personal contract purchase (PCP) is a type of asset finance that is similar to contract purchase, except that it is designed for personal use, not business use. PCP usually offers lower monthly payments and lower interest rates than contract purchases, as the lender assumes that the vehicles will have a higher residual value at the end of the term, due to less wear and tear. However, PCP also has stricter mileage and condition limits, which means that you may have to pay extra fees if you exceed them.
If you are looking for a fleet of commercial vehicles in the UK, you have a lot of options to choose from. Whether you need vehicles for transport, delivery, construction, or emergency services, you can find a model that suits your business needs and budget. In this table, we have listed some of the types of vehicles that are available for financing in the UK, along with their price ranges.
You can compare the performance, design, and features of different models and decide which one is the best for you. Remember, these prices are only averages and may vary depending on various factors. Always consult with the lender or supplier before making a purchase.
The price range is based on the average market value of new and used vehicles as of February 2024
|A large truck with a trailer attached, used for transporting goods over long distances, diesel engines, powerful and durable performance, spacious and comfortable cabin, advanced safety and navigation features
|£50,000 to £150,000
|£400 to £1,200
|A medium-sized truck with a box-shaped cargo area, used for delivering goods within a city or region, petrol or diesel engines, versatile and efficient performance, compact and easy to manoeuvre, basic safety and infotainment features
|£10,000 to £50,000
|£80 to £400
|Light/medium duty truck
|A small or medium-sized truck with a flatbed or a dump body, used for hauling or dumping materials, petrol or diesel engines, agile and reliable performance, simple and practical design, standard safety and infotainment features
|£5,000 to £30,000
|£40 to £240
|A small or medium-sized truck with an open cargo bed, used for personal or commercial purposes, petrol or diesel or hybrid engines, smooth and powerful performance, sporty and rugged design, comfortable and spacious interior, advanced safety and connectivity features
|£15,000 to £60,000
|£120 to £480
|A large or small vehicle that is towed by another vehicle, used for transporting goods or equipment, various types and sizes, such as flatbed, refrigerated, enclosed, etc., no engine or performance features, basic safety features
|£1,000 to £50,000
|£8 to £400
|A large or small vehicle or machine that is used for construction or demolition purposes, such as bulldozers, scrapers, excavators, etc., diesel or electric engines, robust and heavy-duty performance, functional and durable design, standard safety features
|£10,000 to £500,000
|£80 to £4,000
|A large or small vehicle that is used for emergency services, such as ambulances, fire trucks, etc., petrol or diesel or electric engines, fast and responsive performance, distinctive and visible design, equipped with sirens, lights, and communication systems, advanced safety and medical features
|£20,000 to £200,000
|£160 to £1,600
If you choose to finance your fleet of commercial vehicles using an asset finance plan, such as hire purchase, lease purchase, contract purchase, or PCP, you may be wondering what happens at the end of the plan. Depending on the type of plan you have, you may have the following options:
The best option for you will depend on your business needs and financial circumstances, as well as your preferences and plans for the future. You should compare the costs and benefits of each option and make an informed decision.
Finding the best deal for fleet finance and leasing can be a challenging task, especially if you are not familiar with the different options, terms, and conditions. That’s why using a finance broker can help you get the best deal and the most suitable option for your business. At Clifton Private Finance, we can help you:
At Clifton Private Finance, we are a leading finance broker in the UK, and we specialise in fleet finance and leasing. We have access to multiple asset finance lenders, and we always compare the best options to offer you bespoke finance solutions that suit your business needs and budget.
If you are interested in fleet finance and leasing, contact us today and speak to one of our expert advisers. We will be happy to answer any questions you may have, and provide you with a free, no-obligation quote. We look forward to hearing from you soon.
Call us today to discuss your requirements on 0203 900 4322
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