Van Finance Deals

How to compare van finance properly

A useful van finance comparison is not just a list of monthly payments. Two agreements at the same monthly cost can differ hugely on total repayable, deposit, balloon payment and what happens at the end of the term. Look at the whole shape of the agreement, not the headline figure.

What makes van finance cheap, and what only looks cheap

Cheap van finance usually means one of three things: a genuinely lower rate because the risk is lower, a longer term that reduces the monthly figure while increasing the total, or a large balloon payment deferred to the end. Only the first is actually cheaper. The other two move the cost rather than remove it.

This is why the cheapest-looking deal on a forecourt is often not the cheapest deal available to you. Ask what the total amount repayable is, and compare that number.

Why forecourt finance is rarely the whole market

When you buy from a dealer, the finance comes from whoever the dealer has an arrangement with — one lender, or a small panel. It is almost never the whole market, and the dealership has no obligation to tell you what else existed.

You are also negotiating two things at once, the price of the van and the cost of the money, with the same person, at the point where you have already decided you want the vehicle. Agree the vehicle price on its merits and arrange the funding separately, and you negotiate from a stronger position on both.

Commercial van finance for businesses

Commercial van finance is assessed on the business rather than on you personally. For a limited company that usually opens up better terms than a personal agreement, and it keeps the vehicle where it belongs in your accounts.

Where the best van finance deals actually come from

The best van finance deals in the UK rarely sit in one place. They move between lenders depending on appetite, the asset and the profile of the applicant. A lender competitive on a new panel van this month may be uncompetitive on a used tipper next month. That is the argument for a broker over a single forecourt.

One more practical point: comparing by applying to several lenders yourself leaves a credit footprint each time. We look once and approach the lenders whose policy actually fits.

See also: van finance generally, or used van finance if you are buying second-hand.