The Six Factors That Set Your HGV Finance Rate
1. Credit Score and History
The single biggest driver of your rate. Lenders use both business credit bureau data and personal director credit checks. Clean credit with no adverse history and prompt payment across all credit accounts gives you access to the best rates. CCJs, defaults and late payments increase the risk premium you pay.
2. Time in Business
Established businesses (>3 years, with audited accounts) are lower risk. Newer businesses pay more because lenders have less data to assess their ability to service the debt. The longer your track record, the better your rate.
3. Vehicle Age
New vehicles attract the best rates. As vehicles age, residual value uncertainty increases and lenders charge more to compensate. A new Volvo FH might attract 7% APR; a 7-year-old equivalent might be 11–13%.
4. Deposit Size
A larger deposit reduces the lender's loan-to-value exposure. Even an extra 5% deposit can meaningfully improve your rate. Moving from 10% to 20% deposit on a £100,000 HGV typically reduces the APR by 0.5–1.5%.
5. Finance Structure (HP vs Lease)
HP and finance lease are priced differently by lenders. HP typically attracts slightly lower rates on prime applications; leases may be priced differently to reflect the residual value risk retained by the lender.
6. Lender Competition
Using a broker who approaches multiple lenders simultaneously creates competition for your business. Direct bank applications give you one price; a broker can return 3–5 competitive quotes for the same transaction.
| Factor | Better Rate | Worse Rate |
|---|---|---|
| Credit | Clean, 3+ years | CCJs, defaults |
| Time trading | 5+ years with accounts | Under 2 years |
| Vehicle age | New or under 2 years | 7+ years |
| Deposit | 20%+ | 10% or less |
| Application quality | Full financials, proactive explanations | Incomplete, unexplained issues |