Truck Loan Calculator (UK)

How the payment is worked out

The amount financed is the truck price plus any tax and fees you roll in, minus your deposit and trade-in. With no balloon, each monthly payment is P × r ÷ (1 − (1 + r)−n), where P is the amount financed, r the monthly rate and n the number of months.

A balloon (also called a residual or final payment) is a lump sum left owing at the end. Because you don’t repay that part until the last month, it lowers every monthly payment, but you pay interest on it for the whole term, so total interest goes up.

How to get HGV finance in the UK, step by step

1. Get the right licence. Category C1 for 3.5–7.5 tonnes, C for rigid lorries over 3.5 tonnes and C+E for articulated lorries or a lorry and trailer. Professional drivers also need a Driver CPC qualification card (35 hours of periodic training every 5 years) and a digital tachograph driver card from the DVLA.
2. Apply for an operator’s licence (O-licence) from the Traffic Commissioner if you’ll use goods vehicles over 3.5 tonnes for business. A standard licence is for carrying other people’s goods for hire or reward; a restricted licence is for carrying your own goods only. Most lenders won’t pay out until the O-licence is granted, or at least applied for.
3. Show financial standing. For a standard licence you must have £8,000 available for the first HGV and £4,500 for each additional one (restricted: £3,100 and £1,700). This is money you must keep available, not a fee.
4. Choose the finance type: hire purchase, lease purchase (HP with a balloon), finance lease, contract hire or refinancing a truck you already own.
5. Get quotes from a broker or lender with the vehicle details, then submit the documents below. Expect a credit search on the business and on directors or partners.
6. Pay the deposit and VAT, insure the truck, sign the agreement and take delivery.

Documents you need for UK truck finance

You (each director, partner or sole trader)

• Photo ID: passport or photocard driving licence
• Proof of address dated within the last 3 months (utility bill, council tax bill or bank statement)
• Three years’ address history (lenders run a credit search on each director)
• Driving licence with category C1, C or C+E if you’ll drive
• Driver CPC qualification card and digital tachograph driver card
• Consent for a credit search and, for new businesses, a personal guarantee

Your business

• Companies House registration number (limited companies) or partnership details
• Operator’s licence number, or your O-licence application and the Traffic Commissioner’s reference
• Transport manager details and CPC certificate (standard licence)
• Operating centre address and proof you can use it (lease, ownership or written permission)
• VAT registration number and recent VAT returns
• Business bank account details for the direct debit

Income and accounts

• 3–6 months of business bank statements (12 months for larger deals)
• Last two years of filed accounts (limited companies) or SA302 tax calculations and tax year overviews (sole traders and partnerships)
• Up-to-date management accounts if your last year-end is more than 9 months old
• A list of existing finance agreements (asset and loan schedule)
• Contracts, haulage agreements or letters of intent from customers, especially for start-ups
• A business plan with a cash-flow forecast if you’ve traded for less than two years

The truck

• Dealer quote or invoice with make, model, registration, VIN/chassis number, mileage and price
• For a private or auction sale: the seller’s details, V5C logbook and an HPI (outstanding finance) check
• Proof of deposit and VAT funds
• Part-exchange details and any settlement figure on the old truck
• Commercial vehicle insurance with the lender noted as the owner

Rates, deposits and tax

Established operators with good credit typically pay a few points above the Bank of England base rate; start-ups and those with poor credit pay much more. Lenders usually want a deposit of 10% or more plus the VAT, which you reclaim on your next VAT return if you are VAT-registered. On hire purchase you own the truck at the end, so it qualifies for capital allowances (the Annual Investment Allowance, or full expensing for companies buying new). Agreements of £25,000 or less with a sole trader or a partnership of two or three can be regulated by the Consumer Credit Act.