Part of: Van Finance
Used vans from dealers, auctions and private sellers
Used van finance
Most lenders will finance a used van. The questions that matter are how old it will be and how many miles it will have covered by the final payment, and who you are buying it from.
- An enquiry, not an application
- New and used vans
- Ownership and VAT explained
A good used van can be a sensible buy. It costs less than new, the steepest early depreciation has already happened, and for many trades a three or four year old van does the job just as well. Finance for a used van works on the same structures as new: hire purchase, finance lease and lease purchase.
The difference is that lenders think about the end of the agreement as much as the start. They want the van to still have useful life and value when the last payment falls due. That is why most lenders set limits on the age and mileage the van can reach by the end of the term. Those limits vary between lenders, and they shape how long a term you can have.
Where you buy matters too. Dealers are straightforward for lenders. Auctions and private sales are possible with some lenders, but need more checks before the money is released.
Who this suits
Used van finance suits businesses that want a proven working vehicle without paying new prices, or that need a van quickly from stock.
- Trades and service businesses replacing an older van
- Newer businesses keeping the amount borrowed down
- Businesses buying a specific converted van, such as a tipper or a racked van, from stock
- Buyers sourcing from auctions or private sellers who understand the extra checks
What lenders look at
Alongside the business and its people, the lender looks closely at the van. Its age now, its mileage now and its likely age and mileage at the end of the term are the starting points. A van that would be very old or very high mileage at the end may only be financeable over a shorter term.
The lender also checks the van's history: outstanding finance, write off markers and whether the seller has the right to sell it. A van with existing finance can still be bought, but the existing lender must be settled as part of the deal.
- Age and mileage at the start and at the end of the term
- Vehicle history checks, including outstanding finance and write off records
- Who the seller is: franchised dealer, independent dealer, auction or private
- Service history and condition
- Any conversion or bodywork that affects value
What you will need
Have the usual business documents ready, plus these details about the van.
- Registration number, mileage and an advert or invoice
- Seller details, and for private sales the seller's contact and proof of ownership
- Service history if available
- For auctions, the auction house details and any timescale for payment
- Details of any deposit or part exchange
Typical structure
Hire purchase is the most common choice for used vans. You own the van at the end, payments are fixed and the term is set to suit the van's age. A VAT registered business can usually reclaim VAT where the van is sold with VAT, subject to business use. Some used vans are sold under the margin scheme, where no VAT is shown and none can be reclaimed.
Lease purchase can lower monthly payments on a used van, but the balloon has to reflect what the van will realistically be worth at the end. On older or higher mileage vans, lenders often offer smaller balloons or none.
Finance leases on used vans are available from some lenders, usually for younger vans and VAT registered businesses.
Auctions and private sales
Some lenders will finance auction purchases, often by paying the auction house directly once the van is confirmed. Timing is tight, so talk to us before the sale rather than after. Private sales are possible with some lenders, who usually pay the seller directly after checking ownership and history.
If a lender cannot support the purchase route, it is better to know before you bid or agree a price.
Common mistakes
These cause the most trouble with used van finance.
- Agreeing a price at auction before checking a lender will accept the van and timescale.
- Choosing a term the van cannot realistically last.
- Assuming VAT is reclaimable when the van is sold under the margin scheme.
- Buying privately without checking for outstanding finance.
- Overlooking conversion costs or condition issues that affect value.
Sole traders and partnerships
If you are a sole trader, a partnership of two or three partners, or an unincorporated body, some finance agreements may be regulated under the Consumer Credit Act 1974. A regulated agreement carries extra protections and different paperwork. Whether yours is regulated depends on the amount borrowed, the purpose and any exemptions that apply. We will tell you before you proceed, and the lender will confirm it in the agreement.
Questions we are asked
How old can a used van be for finance?
It depends on the lender. Most set limits on the van's age and mileage at the end of the term, so an older van usually means a shorter term.
Can I finance a van from an auction?
Some lenders finance auction purchases. Speak to us before bidding so the lender and timescale are confirmed.
Can I finance a van bought privately?
Some lenders will, after checking the seller's ownership and the van's history. They usually pay the seller directly.
Can I reclaim VAT on a used van?
Only where VAT is charged on the sale and you are VAT registered, subject to business use. Vans sold under the margin scheme carry no reclaimable VAT.
What if the van still has finance on it?
The existing finance must be settled as part of the purchase. A history check shows whether finance is outstanding.
Can I have a balloon on a used van?
Sometimes. The balloon must reflect the van's likely value at the end, so older vans often get smaller balloons or none.
Related van finance guides
Your business circumstances
Compare finance structures
Choose your van
This page is general information, not tax, accounting or legal advice. Tax and VAT treatment depends on your circumstances and can change. Speak to your accountant before choosing a structure. Finance is subject to status and lender approval.
Who you are dealing with
A broker, regulated, and clear about it
Sorbus Finance Limited is an appointed representative of Moorgate Finance Limited, which is authorised and regulated by the Financial Conduct Authority (firm reference number 662419). We are a credit broker, not a lender.
We work with a panel of lenders that includes high street banks, specialist asset finance lenders and manufacturer linked finance houses. Each has its own criteria, so part of our work is matching your business to the lenders likely to say yes, rather than applying everywhere.
Not all commercial finance activities or agreements are regulated by the Financial Conduct Authority. Regulatory protections depend on the activity, agreement and customer circumstances.