August 19, 2021 at 2:52 PM

Van finance is a significant factor to consider when purchasing used vans because there are few options available. When choosing your financing option, ask yourself this question – what would happen if you experienced a sudden drop in your cash flow? This means the option that you choose will entirely depend on your ready cash and the type of business you own.

Hire Purchase (Van HP) is the most popular option of van financing and it allows you to split the cost of the used van into manageable monthly payments. Personal Contract Purchase (Van PCP) is also gradually garnering more buyers for used vans especially those who buy them for personal use. It is determined by the mileage and age of the used van.

A Guide To Van Finance

This article will discuss both types of van finance, the differences between them, and their pros and cons.

Van Hire Purchase (Van HP)

This is a type of van financing that allows you to divide the van's cost over several months instead of purchasing it outright. When entering into a hire purchase agreement, you will pay the initial deposit. The deposit is deducted from the van's buying price and the balance is split to determine your monthly installments.

The used van will belong to your finance provider legally until you have completed paying all the monthly installments and the agreement term is complete. Once you've all paid up, the ownership is transferred to you.


  • You will be in a position to afford a high specification better van such as a Volkswagen Transporter or a Ford Transit.
  • The monthly installments are fixed.
  • Instead of a large outright cost of the van, you will have easy monthly repayments.
  • At the end of the HP agreement, you get to keep your van.


  • The ownership of the used van does not belong to you until your contract is complete. This means that it can be repossessed by the finance provider if installments have not been made.
  • Your likelihood to get approval for a used van financing will be subject to your credit score.

Van Finance From Avondale

Van Personal Contract Purchase (Van PCP)

Also known as the Guaranteed Minimum Future Value (GMFV), this is the alternative to the van hire purchase agreement and it determines the van's value at the beginning of the contract and the value is deferred till the end of the agreement. The GMFV is calculated based on several factors such as the age of the vehicle at the end of the contract and the number of miles it will have covered.

When entering into a contract, you will agree on upfront the initial deposit which will be deducted from the van's value and the amount of money that you want to borrow. The application will then be submitted to a motor finance company and once you have passed their checks, your financial provider will offer to pay for the van's cost on your behalf. During the contract, your monthly repayments will be equivalent to the van's full price including accrued interest minus the van's GMFV. 


  • The monthly repayments are fixed so you can budget accordingly.
  • Once the contract ends, you can decide what to do with the van.
  • You only have to pay a low initial deposit when entering the contract.
  • The monthly installments are lower as compared to hire purchase installments of a similar van and term.


  • When returning the used van, it has to be in great shape. Otherwise, you will be charged for any damage.
  • You will be charged for any additional annual mileage.

You can find more details about our used van finance here and even apply online if you are ready. Alternatively, feel free to get in touch by calling, emailing or visiting us and speaking to one of our staff who can answer all of your questions.

Category: Blog