Commercial Vehicle Loan UK: HGV Finance, Trucks and Specialist Vehicle Funding

What is a commercial vehicle loan?

A commercial vehicle loan is asset finance specifically for trucks, HGVs, tankers, flatbeds, tippers, curtainsiders and specialist commercial vehicles. The vehicle acts as security. The business uses the vehicle from delivery and makes fixed monthly payments over three to seven years. For most owner-operators and hauliers, hire purchase is preferred as it provides AIA and ultimate ownership.

Tax treatment for HGVs

HGVs over 3.5 tonnes GVW are classified as plant and machinery for capital allowance purposes and qualify for AIA up to £1 million per year under hire purchase, giving 100 percent first-year relief. Writing Down Allowances at 18 percent apply where AIA is exceeded. Commercial vehicles are explicitly excluded from the car capital allowance rules, so emissions-based restrictions that apply to cars do not apply to HGVs.

The Benefit in Kind rules for company cars and vans also do not apply to HGVs in the same way. An HGV driver using the vehicle to travel to and from work is not typically subject to a BiK charge as the vehicle is used in performance of duties.

Specialist lenders for commercial vehicle finance

Close Brothers specialises in commercial vehicle finance with specific products for haulage and logistics operators. Novuna (formerly Hitachi Capital) has significant commercial vehicle finance operations. Time Finance serves owner-operators and smaller hauliers with flexible criteria. Aldermore Bank has commercial vehicle finance offerings. The FLA reports commercial vehicle finance fell 15 percent in January 2026, reflecting market uncertainty after the post-pandemic spike. Businesses financing in the current market may find more negotiating room on rates and terms.

Types of commercial vehicle finance

Hire purchase is the most common structure for owner-operators and smaller haulage businesses. Legal ownership transfers on the final payment and the business claims AIA on the full vehicle cost in year one. Finance lease suits fleet operators who want standardised replacement cycles -- the lender retains ownership and the business makes tax-deductible lease payments. Operating lease is used by larger fleet operators who want fully maintained vehicles at a fixed monthly cost with no residual value risk. Sale and leaseback is available for businesses that own commercial vehicles outright and want to release capital while retaining use of the asset.

Used HGV finance

The UK has an active secondary market for commercial vehicles. Specialist auction houses including Ritchie Bros, BCA Commercial and DAF Trucks Used Vehicles regularly offer used HGVs across all categories. Used commercial vehicle finance is available for vehicles up to approximately 15 years old, with most lenders applying a maximum mileage of around one million kilometres. Rates for used commercial vehicles typically range from 8 to 18 percent APR depending on age, condition and the operator's credit profile. A specialist independent engineer's report is advisable for any used vehicle above £50,000 and will often be required by the lender.

Comparing commercial vehicle finance quotes

Always compare on APR and Total Cost of Finance rather than monthly payment alone. A 60-month agreement at a higher rate may have lower monthly payments than a 48-month agreement at a lower rate, but the total cost will be higher. Arrangement fees of one to two percent are standard with specialist lenders. Early repayment charges may apply if the vehicle is sold or refinanced before the end of term. For larger fleets, block discounting arrangements -- where multiple agreements are packaged together -- can achieve better rates than individual vehicle agreements. Using an NACFB-accredited commercial vehicle finance broker gives access to multiple lenders with a single application.

Frequently asked questions

What is the difference between an LCV and an HGV for finance purposes?

An LCV has a GVW of 3.5 tonnes or less. An HGV exceeds 3.5 tonnes GVW. Both qualify for AIA under hire purchase. The key difference is BiK: LCVs attract the fixed van BiK rate (£3,960 for 2026/27), while HGVs used in performance of duties generally do not create a BiK charge for drivers.

Can I finance a used HGV?

Yes. Used HGV finance is available for vehicles up to approximately 15 years old and up to 1 million kilometres. The strong secondary market gives lenders confidence in residual values. Rates for used HGVs are typically 8-18% APR depending on age, condition and operator credit profile.

What documents do I need for commercial vehicle finance?

Two to three years of filed company accounts, recent bank statements (six to twelve months), evidence of the vehicle being purchased, and for owner-operators, director personal details including driving licence and personal credit information. Larger facilities may require an asset list and management accounts.

Is an operator licence required before getting HGV finance?

Lenders check that the business holds a valid Operator Licence (O-licence) for vehicles requiring one. An O-licence is required for HGVs used commercially on public roads. The O-licence application and the finance application can proceed in parallel, but lenders typically require evidence of the licence before drawdown.

What is the maximum HGV finance term?

Commercial vehicle finance terms typically run from two to seven years depending on the vehicle age, condition and lender criteria. Longer terms reduce monthly payments but increase total interest cost. For used vehicles, terms are typically shorter reflecting the age of the asset at the end of the agreement.