TL;DR
Buying used plant and machinery allows UK businesses to acquire equipment at 40 to 70 percent of new cost while still claiming Annual Investment Allowance on the purchase price. Finance is available for used plant from specialist lenders up to 15 years old. Major UK auction houses include Ritchie Bros, Euro Auctions and BCA. Tax treatment under hire purchase is identical to new plant -- AIA applies in full.
Last reviewed: June 2026 | Sources: FCA Register, FLA, HMRC, legislation.gov.uk
|
Key Facts Saving vs new: 40-70%AIA on used plant: Yes -- same as newMajor auctions: Ritchie Bros, Euro Auctions, BCAApproval rate: 96% (FLA) |
Why buy used plant and machinery?
Used plant represents significant savings versus new -- typically 40 to 70 percent of new price for well-maintained machines with service history. For businesses that need productive capacity rather than the latest technology, the used market delivers equivalent operational performance at a fraction of the new cost.
AIA applies to qualifying used plant and machinery purchased through hire purchase in exactly the same way as new equipment. A business purchasing a used excavator for £60,000 on HP can claim the full £60,000 as AIA in the year of purchase, generating £15,000 tax relief at the 25 percent corporation tax rate.
Where to source used plant
The UK used plant market is active and well-organised. Major auction platforms include Ritchie Bros (ritchiebros.com) specialising in construction and industrial plant, Euro Auctions (euroauctions.com) covering construction, agriculture and transport, and BCA Commercial (bca.com) for commercial vehicles and plant. Online marketplaces including Machinio and Plant Planet aggregate dealer and private listings. Specialist plant dealers often offer part exchange and finance arrangements.
Finance for used plant
Used plant finance is available from specialist lenders subject to age and condition criteria. Most lenders finance used plant up to 15 years old, with rates reflecting residual value risk. For auction purchases, lenders typically require the auction invoice and may apply a maximum loan-to-value of 70 to 80 percent. Sale and leaseback -- selling plant the business already owns to a lender and leasing it back -- can release capital from existing unencumbered assets.
Used vs New Plant and Machinery: Finance Comparison
| Factor | New Plant | Used Plant |
|---|---|---|
| Cost | 100% of list price | 30-60% of new |
| AIA eligibility | Yes | Yes -- same rules |
| Finance availability | All lenders | Specialist lenders, age limits |
| Typical APR | 5-10% | 8-18% |
| Warranty | Full manufacturer | Limited or none |
| Max age for finance | N/A | Typically 15 years |
| Inspection required | Not usually | Recommended for >£50,000 |
Source: NACFB, FLA, HMRC. Rates indicative as of June 2026.
|
Related Guides |
|
Disclaimer This guide is for information only and does not constitute financial advice. Asset finance products vary by lender and business circumstances. Always verify lender details on the FCA Financial Services Register at register.fca.org.uk before applying. Kael Tripton Ltd is an independent editorial publisher and is not regulated by the FCA. |
Frequently asked questions
Can I claim AIA on used plant and machinery?
Yes. AIA applies to qualifying plant and machinery regardless of whether new or used, provided it is purchased through hire purchase or outright. There is no distinction in the Capital Allowances Act 2001 between new and second-hand assets for AIA purposes.
Can I get finance for plant purchased at auction?
Yes. Many specialist lenders finance plant purchased at auction, using the hammer price invoice as the basis. Some lenders require the auction house to be on an approved list. For high-value purchases, pre-arranging finance before the auction ensures funds are available for the payment deadline, typically 24 to 48 hours after the hammer falls.
How do I value used plant for finance?
Lenders use market value based on recent auction data and dealer prices, an independent engineer's valuation, or the purchase invoice. The lender may apply a loan-to-value ratio of 70 to 80 percent. For planning purposes, a specialist valuer from RICS or a machinery valuation firm can provide a credible independent opinion.
What is the oldest plant I can finance?
Most specialist lenders finance plant up to 15 years old in good working order with demonstrable residual value. Some lenders extend to 20 years for particularly durable asset categories such as quarrying and mining equipment. Beyond these age limits, outright purchase or sale and leaseback may be the only options.
What is sale and leaseback for plant and machinery?
Sale and leaseback involves selling plant the business already owns outright to a lender and immediately leasing it back. This releases the capital tied up in the asset while the business continues to use it. The business makes lease payments to the lender and the lender retains ownership. This is a useful source of working capital for businesses that own unencumbered assets and need cash.
|
Sources Capital Allowances Act 2001 |
