Used Van Finance Deals

How To Get Van Finance Deals When You’re Self-Employed

How To Get Van Finance Deals When You’re Self-Employed

Self-employed people represent a significant percentage of people in the United Kingdom. From 3.2 million, self-employed people grew steadily and peaked at over five million in the early months of 2020.

However, the pandemic has affected these levels of self-employment. Despite the flunk in levels, these people still work, and vans are generally crucial in their jobs.

Most self-employed men are in the construction and building trades or agriculture and related trades — all requiring vans. If this type of vehicle is crucial in your line of work, then you may want to think about how to get used van finance deals when you’re self-employed.

Self-employment entails varied positions. You’ll see below how different types of self-employment can land you a van finance deal. 

1. Boost Your Credit Score

First, evaluate your credit score with the main credit reference agencies. This is essential because lenders require information from credit agencies in considering your finance application.

Moreover, your credit score report includes your financial information. Financial information includes overdrafts, existing loans, loan defaults, and other financial applications you applied for.

To improve your credit rating for a van finance application, ensure that you are registered to vote. If you have joint accounts that are no longer in use, unlink them.

Also, pay your credit card bills and loans on time. If you keep missing your accounts, set up direct debits, so you never miss payments. 

2. Sell Yourself

Present your best self to the finance company. Selling yourself means cancelling unwanted or unused subscriptions.

This also means settling your existing loans and terminating financial partnerships with poor credit history. Connections can have a negative impact on your score, which is why ceasing unhelpful associations is necessary. 

3. Include Your Proof Of Income

Proof of income is necessary when you’re applying for van finance. Lenders generally ask for your bank statements from the previous three months to the present, your most recent tax return, and proof of earnings. 

Lenders will also require you to provide a three-year proof of employment history. They would also need your address history for three years and evidence that you have been a UK resident for five years, at most.

If you have no proof of income, it will be challenging to get van finance. To make up for your lack of evidence of income, you have to ensure you have an excellent credit score or opt for a joint application. 

Options For Self-Employed People

If you find the above options to be too challenging to meet, here are some alternatives:

Leasing

Leased vans come with a fixed monthly cost with a small initial payment before the agreement is signed. After signing the deal and the initial payment, the person must pay a fixed monthly fee for the rest of the contract. 

The monthly fees are not overly-expensive, and it is basically renting a van from a leasing company. You can even claim the VAT back from the leasing company if you are VAT registered, so it may even be more affordable for you.

Be mindful of the company’s policy regarding the van’s fair wear and tear. 

Hire Purchase (HP)

Hire purchase is a popular form of van finance with contracts that last from two to five years. On average, the hire purchase contract lasts up to three years. 

The deposit is low and may even be £0 for some. You will need to pay fixed monthly fees as well and up to the end of the contract.

After the contract is up, the van is legally yours. Generally, hire purchase deals are around £100 monthly if you provide a 10% deposit. 

Personal Contract Purchase (PCP)

Personal contract purchase is more well-known amongst car financers, but it works for van finance too. After the PCP agreement, you have the option to buy the van or choose a newer vehicle.

Like with the above examples, the larger your deposit at the start of the agreement, the lower the monthly payments will be. Moreover, if you opt for a newer van, you would have a manufacturer warranty. 

There is also the advantage of cleaner engines, enhanced onboard connectivity, and improved safety. 

Cash 

If you do not want a prolonged agreement, you can use a business loan or your income to buy a second-hand van in cash. Although, you have to do vehicle history checks and approved used warranties. 

Some companies deliver vans to your door and guarantee your money back if it doesn’t work for you. If you do not wish to bank your van after some time, it is better to opt for a second-hand vehicle.

Second-hand vehicles are also better if your sole purpose in using them is for work. You can freely run them down as you do your job without incurring mileage or damage charges.

Conclusion

To conclude, there are several ways to acquire van finance, even if you are self-employed. You have the option of applying to lenders, but you have to maintain several things and sell yourself to them.

Another option is choosing a leased van or opt for hire purchase. If you’re using the van for both work and investment, choosing PCP is ideal.

However, if you plan on using the van solely for work, purchasing a second-hand van is satisfactory. Vans are varied and flexible for work, so choose the one compatible with your business and future plans.