Can I get van finance if I'm self-employed?

If you’re self-employed, a van might be a crucial part of your business. Here are your options if you’re looking to finance a van

Gavin Braithwaite-Smith
Apr 4, 2022

There are more than five million self-employed people in the UK, up from 3.2 million in 2000. That represents 15.3% of the UK workforce - up from 12% in 2000, according to the Office for National Statistics.

Self-employed people work for themselves, rather than receiving a wage or salary from an employer and judging by the data, a large proportion of these people are likely to rely on a van to run their business. The top three occupation types for self-employed workers, for instance, are construction and building trades, road transport drivers and agriculture and related trades - areas where vans are often a crucial part of the job.

If a van is essential to your business, you might be wondering if it’s possible to get finance when you’re self-employed. The good news is that you can, but there are a few things to consider before you start looking at the 1451 used vans for sale on BuyaCar.

As a self-employed worker without a regular income, many lenders will view you with caution, so you’ll be asked to provide some documentation to confirm your identity. Bank statements showing a regular income should be sufficient for most lenders, but we’ll come to that in a moment.

It’s a bit of a ‘chicken and egg’ situation. You need a van in order to make money, but some lenders will be reluctant to provide finance if you’re unable to provide evidence that you’ll be able to keep up with a payment schedule. So what are your options, and how can you improve your chances of getting credit?

No matter what your current position, it may be possible to secure yourself a car finance deal if you don't have the cash to spare. Click on the link below that best reflects your situation to find out more:

Self-employed van finance: give your credit score a boost

You can check your credit score with the main credit reference agencies: Experian, Equifax and TransUnion. Lenders use the information held by these agencies when considering your finance application, so it’s important to check it’s correct.

Your credit report will record financial information relating to any existing loans, overdrafts, loan defaults and even any finance applications you have made. Check it carefully. Something as trivial as a mobile phone contract linked to an old address could have a negative impact on your credit score.

Make sure you’re registered on the electoral roll - meaning you're registered to vote - as this can improve your credit rating. Unlink any joint accounts you no longer have and be sure to pay your loan and credit card bills on time. Setting up direct debits to ensure you never miss payments could also be wise.

Van finance for self-employed people: get your house in order

Linked to the above, make sure you present the best possible case to the finance company. It’s a little like a dating profile, so sell yourself.

Settle any existing loans, cancel any unwanted subscriptions (music, TV, magazines, etc), and terminate any existing financial partnerships with anyone who has a poor credit history, as these can all have a negative impact on your credit score and/or the amount of money you are able to borrow.

Provide proof of income

Providing proof of income is an important part of a van finance application. Most lenders will require bank statements for the previous three months, a proof of earnings SA302 form and a copy of your latest tax return.

You will also need to provide evidence of employment history for the previous three years, your address history for the same period and proof that you’ve been a UK resident for a minimum of five years. Any self-employed income must go into a bank account in your or your partner’s name.

Securing van finance will be more difficult if you cannot provide proof of income. If this is the case, you’ll need to build a strong credit score, pay a larger deposit or use a guarantor or joint application to benefit from the other party's higher credit score.

How does van finance differ from car finance?

There’s little difference between financing a van or a car, but you should think carefully about what your van will be used for.

For example, if you’re a self-employed builder or your job puts the van at risk of damage, a lease might not be right for you as you'll have to maintain and care for your van in the same way as a passenger car, so handing it back with dents, broken trim and a damaged load area is unacceptable and could result in significant end-of-contract damage charges.

It's a similar situation if you opt for Personal Contract Purchase (PCP) and choose to hand the van back when the contract ends, though if you make the optional final payment to buy it that isn't an issue, as you then own it outright.

Finance companies will confirm what’s considered fair wear and tear when you sign the agreement, so check the details before signing the contract, so you understand exactly what is acceptable if you return the vehicle at the end of the contract. Signage, stickers and decals will need to be removed before you hand back the van if you lease or go for PCP and don't buy it at the end of the contract.

If that all sounds like too much hassle, the main option for financing a van is Hire Purchase (HP). That's because Hire Purchase is set up so that at the end of the contract, the van is yours, so there's no need to worry about damage charges or fines for going beyond the pre-agreed mileage limit. That's handy for those who have to chuck all sorts of heavy equipment in the back of the van and may have jobs all over the place, making it hard to estimate an accurate yearly mileage.

Monthly payments with Hire Purchase are higher than with PCP finance, though once you've made the last monthly payment you then own the van, whereas with PCP finance you'd still have to make the large optional final payment - which could amount to half of the van's initial price - if you wanted to take ownership. 

Similarly, paying cash for an older van could be an option - small vans are available for as little as £5,000 on BuyaCar. You could use one for a couple of years while you build your business and credit score, then upgrade to a shiny newer van when you have more options open to you. As you'd own the van outright, again damage charges and mileage limits wouldn't be an issue.

Self-employed van finance: the options

Hire Purchase (HP)

This is a popular form of finance for self-employed van drivers, as explained above. Hire Purchase contracts tend to last between two and five years, with a typical length of three years. You pay a deposit at the start of the contract - which could be as little as £0 in some cases - then fixed monthly payments for the duration of the agreement.

At the end of the contract, the van is yours. You can keep it, sell it privately, exchange it for a newer model, or use it as a deposit on a new finance contract. Hire Purchase deals start from as little as £200 per month, typically assuming a 10% deposit.


Big companies tend to lease vans because the cost is bundled into a fixed monthly fee. There’s a small initial payment to make at the start of the agreement, followed by fixed monthly payments for the duration of the contract.

The monthly payments tend to be low, as you’re essentially renting the van from the leasing company. It means that you could be able to afford a newer van than you would by using Hire Purchase. If you’re VAT registered, you should be able to claim back the VAT, making this an even more affordable option.

Just consider the leasing company’s policy on fair wear and tear, which could be a stumbling block if your van is likely to be used and abused, as is the case with many trades, where you need to carry heavy and/or dirty loads that are likely to quickly mark up the back of the van. You will also be required to stick to a mileage limit, with a fee payable for every mile you've exceeded the agreed limit if you don't.

Personal Contract Purchase (PCP)

PCP is one of the most popular forms of car finance, but it could work for self-employed van drivers, too. Unlike leasing, there’s an option to buy the van at the end of the agreement, although many people choose to move on to a new vehicle. With a van, though, you may want to purchase the van at the end of the contract to avoid any additional end-of-contract charges.

The big advantage of PCP is that you can potentially afford a newer van. This is because the monthly payments essentially cover the amount of value the van loses over the length of the contract, with a little interest added, which is broken down into a deposit and a series of fixed monthly payments. The larger your deposit, the lower the payments will be.

Because you could potentially afford a newer van, it’s more likely to be covered by a manufacturer warranty, and there’s the added benefit of cleaner engines, improved safety and enhanced on-board connectivity. In common with leasing, fair wear and tear could be a stumbling block for some self-employed people if you plan to hand the van back at the end of the contract.

If you want to own the van at the end of the contract, you're likely to be better off going for Hire Purchase. As the monthly payments are higher with Hire Purchase, less interest is charged and there's no large optional final payment needed at the end to take ownership, which in the case of PCP could amount to half of the van's value at the start of the contract.


If in doubt, use your income or a business loan to pay cash for a second-hand van. Vehicle history checks and approved used warranties take the guesswork out of buying a used van, so you can buy with confidence. Our vans are delivered to your door with a money-back guarantee, so if it doesn’t work for you, we’ll take it back.

Just remember that the van will depreciate as you use it, so it will be worth less money in a couple of years. This is fine if you plan to run it into the ground, but not so good if you're banking on it being worth a specific amount after a certain time. This is something you don’t have to worry about when leasing or when using PCP and handing the van back at the end of the contract, though you do have to be aware of potential damage and excess mileage charges.

In short, there are several van finance options for self-employed people. Follow the advice above, consider your options, then check out the thousands of vans for sale on BuyaCar. There are vans and pick-ups, big and small, to suit businesses of all shapes and sizes, so click on the link below to start your search.


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