Tipper truck buyers in the UK most commonly choose between hire purchase and finance lease. This guide explains the key differences and includes a worked example based on a 26-tonne DAF CF tipper at £95,000.
Worked Example: 26t DAF CF Tipper - £95,000
Vehicle: 2026 DAF CF 26t tipper - £95,000
| Factor | Hire Purchase (HP) | Finance Lease (FL) |
|---|---|---|
| Deposit / advance rentals | £9,500 (10%) | 3 months (c.£3,800) |
| Finance amount | £85,500 | Based on full value |
| Term | 60 months | 60 months |
| Rate / APR | 6.5% APR | 6% (flat) - approx. 5.8% APR |
| Monthly payment | £1,667 | £1,265 |
| Total paid (excl. deposit/advance) | £100,020 | £75,900 + balloon or residual |
| Ownership at end | Yes - automatic | No - sell or extend |
| Residual value risk | You carry it | Lender carries it |
| VAT on payments | No (on capital) | Yes - 20% on each rental |
When HP Is Better for a Tipper Truck
- You want to own the tipper outright at the end of the agreement
- You plan to run the vehicle beyond the finance term (5–8+ years total)
- You are building a balance sheet with owned assets
- You drive very high mileages that would attract penalties on a finance lease
When Finance Lease Is Better
- You want lower monthly outgoings and plan to replace the tipper at the end of the term
- You are VAT-registered and can reclaim VAT on rentals
- You prefer the lender to carry residual value risk on a specialist asset
- Your accountant has advised finance lease is more tax-efficient for your structure
HP Advantages
- Ownership at end of term
- No ongoing rental commitment
- Builds owned assets on the balance sheet
- No mileage penalties
Finance Lease Advantages
- Lower monthly payments
- Lender bears residual value risk
- Full rental tax deductibility (seek advice)
- Useful for operators who replace on cycle