How Van Finance Rates Are Calculated
Van finance lenders use an internal risk model that scores your application and returns a rate offer. The model considers your business and personal credit, how long you have been trading, the van's age and value, the deposit, and the term length. Understanding these inputs helps you present the strongest possible application.
Credit History
For van finance, lenders check both business credit (for limited companies) and personal credit for all directors. Sole traders are assessed entirely on personal credit. A clean credit history with no adverse markers gives access to the lowest rates. Even minor late payments can add 1–2% to your rate.
Van Age and Value
New vans attract better rates than used ones. Lenders are more comfortable with the residual values on new vans (particularly from main dealers with manufacturer-backed warranties). A new Transit Custom attracts better pricing than a 5-year-old equivalent.
Self-Employed vs Company
For the same credit quality, a limited company with audited accounts is often offered slightly better rates than a sole trader with bank statements only - because the documentation is more standardised and the lender's risk assessment is more straightforward. However, this is not universal.
| Applicant Profile | New Van Rate | Used Van Rate |
|---|---|---|
| Ltd co, 5+ years, clean credit | 5.9%–7.0% | 7.5%–9.5% |
| Sole trader, 3+ years, clean credit | 6.5%–8.0% | 8.0%–10.0% |
| Start-up (<2 years) | 9.0%–12.0% | 11.0%–15.0% |
| Adverse credit | 12.0%–18.0% | 14.0%–20.0% |
How to Get a Better Rate
The most effective steps: offer a larger deposit (even 15% instead of 10% often improves the rate); use a broker to access multiple lenders; apply with the most complete and well-presented documentation you can; avoid multiple direct lender applications in quick succession (which leaves hard search marks on your credit file); and if you have adverse credit, wait until CCJs are satisfied before applying where possible.