| Credit Profile | New Van Finance Lease | Used Van Finance Lease | Term |
|---|---|---|---|
| Strong credit, 2+ years trading | 6.5% – 8.9% APR | 8.5% – 10.9% APR | 24–84 months |
| Standard SME, 1–2 years | 8.9% – 11.9% APR | 10.9% – 14.9% APR | 24–60 months |
| New business / thin file | 11.9% – 15.9% APR | 13.9% – 17.9% APR | 24–48 months |
| Adverse credit | 14.9% – 20.9% APR | 16.9% – 22.9% APR | 24–36 months |
How Finance Lease rate calculation differs from HP
With hire purchase, your monthly payments cover the full value of the van plus interest. With Finance Lease, the lender sets a residual value - what they estimate the van will be worth at the end of the term - and your monthly payments cover only the depreciation (the difference between the purchase price and the residual value) plus interest. This is why Finance Lease payments are typically lower than HP for the same van.
For VAT-registered businesses, Finance Lease has a further cashflow advantage: VAT is charged on each monthly payment rather than on the full purchase price upfront. This means you reclaim VAT monthly rather than waiting for a large upfront reclaim.
At the end of the Finance Lease term, you don't own the van. You can sell it (the proceeds go to the lender, who rebates a portion to you), hand it back, or refinance. If you want to own the van at the end, hire purchase is the right product.
Finance subject to status and credit assessment. Rates shown are indicative only and subject to change. Independent financial advice should be sought where appropriate.