Commercial vehicles play a vital role in businesses across the globe. Companies can use them for various purposes, including transportation of goods and materials, delivery of services, and even mobile offices. Given their importance, it's no wonder that many businesses put a great deal of thought into choosing the right commercial vehicle (or fleet of vehicles) for their needs.
As with any other significant purchase, financing is often an important consideration when acquiring commercial vehicles.
Are you considering the next step in getting a commercial vehicle to grow your small business? Here, we'll look at types of commercial vehicles, methods of commercial vehicle financing, and how getting one can benefit you.
A commercial vehicle primarily transports goods or paying passengers.
A commercial vehicle is primarily used to transport goods or paying passengers. Examples of these vehicles are vans, trucks, HGVs, tractors, pickup trucks and other vehicles used for business purposes. Most commercial vehicles have a gross vehicle weight (GVW) of 10,000lb or more.
Commercial vehicles are subject to different rules and regulations than passenger vehicles, so it's essential to be aware of the differences before you hit the road.
If you're driving a commercial vehicle in the UK, you must:
- have a valid commercial driving licence
- be aged 18 or over (21 for vehicles carrying dangerous goods)
- have completed any required training
- have insurance that covers you to drive the vehicle
- follow the hours of service rules (for vehicles over 3.5 tonnes)
- comply with the 'tachograph' rules (for vehicles that need one)
In the UK, all drivers of commercial vehicles must have a valid Commercial Vehicle Licence (CVL). With this, you can drive a vehicle with a GVW of up to 18,000lb. If you want to drive a vehicle with a GVW of over 18,000lb, you'll need to obtain an HGV licence.
Failure to adhere to the above regulations can result in severe penalties, including fines and the suspension of your driver's license.
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You should ensure you are following all necessary regulations when getting a commercial vehicle.
The main difference between commercial and non-commercial vehicles is how the business uses them. Commercial vehicles are designed and built to carry goods or passengers for hire, whereas non-commercial vehicles are not.
There are a few ways to alter a non-commercial vehicle to turn it into a commercial one, with most of the modifications existing to deter non-paying passengers and make the purpose of the vehicle clear.
There are several ways of doing this:
- Tinting or removing windows.
- Removing back seating.
- Adding signage. This can be anything from simple lettering on the vehicle's side to full wraps covering the entire body.
- Modifying the interior - installing specialised equipment such as a fridge or freezer.
Before making these alterations to a non-commercial vehicle, you should check that your insurance covers you for business use, as standard policies do not usually include this. Additionally, you should ensure that no employees use the vehicle for personal use. To make things easier, you could lease a commercial vehicle from the get-go rather than converting it yourself.
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Your commercial vehicle should be altered so it is clear what it is.
- Delivery & Distribution: From food and drink to building materials and machinery.
- Providing a mobile service: this could be anything from catering to repairs and maintenance.
- Public transport: this includes buses, coaches, and taxis.
- Emergency services: this includes fire engines, ambulances, and police cars.
- Construction: this includes tippers, diggers, and cranes.
- Private hire: any vehicle a customer may want to hire, such as wedding cars or limousines.
- Work vehicles: these could be anything from company cars to vans used by tradespeople.
- Agricultural: any type of vehicle used on a farm or other agricultural services such as tractors or other large vehicles.
- Public services: this could include waste management vehicles such as refuse trucks and street sweepers.
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Your commercial vehicle can be used for a wide range of purposes.
Wondering how to finance a commercial vehicle? You're not alone. Sometimes it's a challenge to work out what's right for you when purchasing a new work truck, van or another type of commercial vehicle.
Finance allows you to get the necessary assets and vehicles while keeping cash within your business. You can read more about these in our other blog posts here:
Everything You Need to Know about Van Finance
Leasing Assets For Your Business
There are various options available for financing a commercial vehicle. The best choice for you will depend on your specific circumstances and needs.
You could take out a loan from a bank or other financial institution. However, getting approved for a loan can be difficult if you have bad credit or no credit history at all, and they often have higher interest rates.
Another option for commercial vehicle finance is an online lender, which tends to be a better option for financing a commercial vehicle than banks. First, online lenders usually have much lower interest rates than banks. They don't have the same overhead costs as banks, meaning they can pass these savings on to their customers. Online lenders typically have much shorter loan terms than banks, allowing you to pay off your loan faster and save on interest. Finally, online lenders typically have much more flexible underwriting criteria than banks. It's generally easier to qualify for a loan from an online lender, even if you have less-than-perfect credit.
You should evaluate your options when looking at commercial vehicle finance as the right choice will vary depending on your business and your financing needs.
You could buy your commercial vehicle, but we believe it is a more sensible option to lease here at Love Finance. Some positives are that it saves money and ensures you get the best vehicles for your business. If you did want to buy outright, you could go down the route of lease purchase - as this allows you to get a feel for the vehicle and buy it at the end of the contract if you wanted to.
Leasing is often a popular choice for businesses as it can offer a more flexible and affordable solution than buying outright. Leasing is a great way to acquire commercial vehicles without making a significant up-front investment. Instead, businesses typically make monthly payments towards the cost of the lease agreement. Hire purchase and contract hire are also both viable options, depending on your specific needs and requirements.
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In conclusion, receiving commercial vehicle funding through a company like Love Finance can allow you to keep funds in your business and give you the freedom and flexibility you require. Our instant, automated system gives you quick advice, and our panel of lenders provide interest rates as low as 2.9%. Apply today!
