Hire Purchase

Own Your Next Van Outright with HP Van Finance

The Hire Purchase (HP) finance option enables you to buy a new van by spreading the cost over monthly instalments. At the end of the agreement, you will own the vehicle outright.

Choosing vans on HP allows you to decide how much you want to pay as a deposit (minimum deposit equal to VAT and the road fund licence) and then complete your purchase with fixed, affordable monthly payments.

Benefits of buying vans on hire purchase include:

Cash flow – Hire Purchase enables you to pay fixed monthly instalments, making it easier to manage your cash flow.
Repayment period flexibility – You choose the repayment term that's right for you – up to 60 months.
Fixed monthly repayments – The payment will be the same every month, helping you to plan your finances.
Deposit – Choose the size of your deposit. The minimum is simply the cost of your VAT and road fund licence.
VAT-free monthly repayment – Paying the VAT upfront means there's no VAT on your monthly payments.
Tax advantages – If you are VAT registered, you can reclaim the deposit.
Tax relief – You can claim 100% tax relief on all interest charges.
Company asset – Your new van is an asset, so it can be offset against your taxable profits.
Ownership – At the end of your agreement, you'll own the van.
No mileage restrictions – Drive your van as much or as little as you want, with no additional fees for excess mileage at the end of the contract.
Equity – You own the equity in your van. Any value above and beyond the settlement figure is yours. If you've finished the repayments, the value is yours, and you can use this as a deposit against your next new van.

Want more options? Try the Finance Lease, Contract Hire packages, or see what other van finance deals are available and choose the one that's the most suited for you and your company, or get in touch with us and one of our finance team members will be more than happy to give you all the details you need to make the best decision.

FAQs

What is Hire Purchase van finance?
Hire Purchase (HP) is a finance agreement that lets you spread the cost of a new van over fixed monthly payments. You pay a deposit upfront, then repay the remaining balance in equal monthly instalments over an agreed term. Once the final payment is made, you own the van outright. There are no mileage restrictions and no end-of-contract condition penalties.
How does Hire Purchase differ from leasing a van?
With leasing (such as Finance Lease or Contract Hire), you never own the vehicle. Instead, you pay to use it for the term and return it at the end. With Hire Purchase finance, the van becomes yours once all payments are complete. HP also has no mileage restrictions, whereas lease agreements typically set a mileage cap with excess charges if you go over. Hire Purchase tends to suit businesses that want to build an asset on their balance sheet and keep the van long-term.
Do I own the van straight away with Hire Purchase?
Not immediately. During the Hire Purchase agreement, the finance company is the legal owner of the vehicle. Ownership transfers to you automatically once you make your final monthly payment. So you can use and rely on the van as your own throughout the agreement, but you cannot sell it without settling the finance first.
What deposit do I need for van Hire Purchase?
The minimum deposit on a Hire Purchase agreement is the cost of VAT and road fund licence (vehicle excise duty) on the van. You're free to put down a larger deposit if you'd prefer lower monthly payments. Bear in mind that the more you put in upfront, the less you borrow and the less interest you pay overall. If your business is VAT registered, you can reclaim the VAT element of the deposit.
Can I reclaim VAT on a Hire Purchase agreement?
Yes, if your business is VAT registered, you can reclaim the VAT paid as part of your deposit. Because the VAT is settled upfront, your monthly repayments are VAT-free, which helps keep your cash flow simple and predictable. Speak to your accountant to confirm the treatment that applies to your specific business circumstances.
Are there tax advantages to buying a van on Hire Purchase?
Yes, there are several worth knowing about. You can claim 100% tax relief on all interest charges paid under the agreement. The van itself is also recorded as a company asset on your balance sheet, which means it can be offset against your taxable profits. If you are VAT registered, you can also reclaim the VAT on the deposit. We'd always recommend discussing the specifics with your accountant or tax adviser first.
How long can a Hire Purchase agreement last?
Hire Purchase agreements at Loads of Vans are available over terms of up to 60 months (five years). The right term for you will depend on your monthly budget and how quickly you'd like to own the van outright. A shorter term means higher monthly payments but less interest paid overall; a longer term reduces monthly outgoings but increases the total amount repayable.
Are there any mileage restrictions on a Hire Purchase agreement?
None at all. Unlike Contract Hire or Finance Lease, Hire Purchase van finance places no limit on how many miles you cover. Whether you're doing short local runs or covering the length of the country every week, there are no excess mileage charges at the end of the agreement. This makes HP particularly well-suited to high-mileage operators.
Can I pay off my Hire Purchase agreement early?
In most cases, yes. You have a legal right to settle a Hire Purchase agreement early, and doing so can reduce the total interest you pay. Some agreements may require a minimum number of payments to have been made before early settlement is permitted. Your finance documentation will confirm the terms. Contact our finance team, and we can walk you through your options.
What happens to the van's value at the end of the agreement?
Once the final payment is made, the van is yours and any equity in it belongs to you. If the van is worth more than you paid in total, that's yours to keep. Many businesses use the trade-in or sale value of a fully paid-off van as a deposit towards their next vehicle, making Hire Purchase van finance a good long-term strategy for managing your fleet costs.