Auto Trader vans

Skip to contentSkip to footer

Your van finance options

When it comes to financing a van, there are quite a few options, and the differences between them can get confusing. Below, we help you get your head around the ins and outs of van finance.

Buying a van outright
As most people would probably expect, the option that is simplest and most easy to understand is to buy your van outright. The benefits of this are that ultimately, the van is yours, and you’re therefore free to sell and trade your van whenever you please. It also tends to be easier to negotiate the price if you’re prepared to pay the full value outright. However, depending on your financial situation, this isn’t a viable method for a lot of people. If you can’t afford to buy your van outright, it may be a better option for you to pay the cost of your van in more affordable monthly payments, split over a longer period of time.
0% finance
If you can’t afford to buy a van outright, then a 0% van finance deal could be a better fit. By the time the payments have been completed, you tend to end up paying the same amount as someone buying their van outright, just in interest-free monthly payments instead. This option can make buying a new van more realistic and affordable if you don’t have a large lump of money lying around.
A 0% finance deal sometimes sounds too good to be true – you’re essentially getting money loaned to you without having to pay a fee. This is why such deals can be a fantastic choice but are often hard to secure, and many are only offered for a limited period. Make sure you know whether you qualify for a 0% finance deal before you spend time looking for one. You’ll need a strong credit profile, as the lender needs to be confident that you’ll be able to pay each month without fail.
Buy a van with a credit card
While not every dealer will accept a credit card, buying a van this way is the same as buying any other product. You’ll pay for the van upfront, and then pay back the credit card company in the coming months. Be aware that this option does require you to pay interest on the outstanding amount. However, as long as you’re meeting the minimum monthly payments, you can decide how much you pay each time.
It’s important to watch out for the issues that can arise from buying a van on a credit card. Even if a dealer will accept them, they often have a limit on how much you can spend, or will charge extra. Your credit card company might also limit how much you can spend on an individual purchase, and it’s likely that this value will be lower than the cost of a van, so it’s important to check beforehand. Buying a van on a credit card is normally recommended to those who don’t need credit and can save up in advance, otherwise, it can be quite a risk.
Buy a van using Hire Purchase (HP)
Buying a van using HP works by putting down a deposit at the outset and paying the remainder off monthly over the coming years. Until the final payment is made, you won’t be the legal owner of your van, but you will be the registered keeper of it and will, therefore, be responsible for its maintenance and insurance.
Using a Personal Contract Purchase (PCP)
PCP works in a similar way to HP, in the sense that you’ll pay a deposit and then a monthly sum over the coming years. The difference, however, is that during a PCP agreement, you’re not paying back the full cost of the van, you’re just paying back the difference between the van’s price when it was new on the market and what its value is predicted to be by the end of the agreement (residual value). This is a large chunk that gets deferred until the end of the agreement.
At the end, you can either pay the remaining balance, alternatively you could also have the option to exchange the van for another van from the dealer who agreed the finance deal in the first place, this way you can use any equity you’ve built up in your current van towards your down-payment.
Using a Personal Contract Hire (PCH)
If you like to switch up your van every few years, PCH can be a good option. You’ll still pay a fixed amount each month, but the van will be on hire, meaning you’ll give it back at the end of the contract - you will never own the van if you buy using PCH. The terms and conditions of this method of leasing tend to be quite strict, so make sure to check these beforehand.

Related Topics