Fleet of van in the parking garage available for finance deal with 0 deposit.

Your Ultimate Guide to Financing a Van with Bad Credit

There are many options available so that people can avail themselves of used van finance deals. Such methods are useful since not everyone can pay for their whole price right away. The question is, what if you have a bad credit history? Will you still be able to get a van?

Before answering that, it is important to note first that there are various options for van financing. These include:

  • Hire Purchase
  • Finance Lease
  • Business Contract Hire

If you are interested in getting van financing with poor credit, both for new and old vans, prepare to show your capacity to pay. The process is similar to applying for a credit card or even a loan.

Understand that the company needs to assess if you can pay the flexible terms they will offer. Sure, they are smaller amounts compared with the full price of the vehicle. But they still need to know that you can be consistent with the payments.

So, what about having a bad credit history, then? Is it impossible to get flexible financing? Is it an automatic dead end if you have a financially unappealing record?

Well, you have to face the reality that availing one will not be a walk in the park. Compared with somebody who was able to build a reputable financial record, you would have a harder time. This is an obvious fact.

It is natural for van companies to ensure that they will have a return on investment. They have also poured finances on the vehicle you want to purchase, even if it is already pre-owned. So they need assurance from you that you will pay for your purchase, even in small increments.

Having said that, it is still possible to get used van finance deals. You just need to be strategic and thorough in your application.

Van for Business Use

If you are looking to get a van for your business, there are important documents you need to submit. The purpose of these requirements is to boost the company’s confidence in you as a client and customer.

First, you need to provide proof that your business is legit. You can do this by providing company details like its name, address, and registration number. In some cases, they require that you disclose the annual turnover.

As you can see, these are not hard to get. If you have a true and existing business, you could easily supply them with this information.

In addition, they would need information on the company’s director. What is his/her name? Is s/he married? When was s/he born? 

Since the transaction involves money, you also need to divulge key bank details of your business like bank name, account number, and sort code. All of these are pretty standard and easily accessible, so you do not need to worry.

If your business is new and has been operating for less than 12 months, they also require additional documentation. Your bank must issue a bank statement on your company with its records for three months. 

You also need to provide a director’s guarantee letter as well as management accounts.


Van for Personal Use

Of course, no one is stopping you if you want a van that you can use for personal purposes. But you also need to prepare a lot of documents. Since you would be availing it only through your resources, you need to convince the company that you have enough personal finances to pay them.

To introduce yourself, you must provide personal details such as your full name, birthday, marital status and number of dependents. Key also in the application is your home address. If you have been moving around a bit, you need to supply all your residences in the past five years.

A convincing argument for your case will also include your current job and previous occupation for the last three years. 

The company needs your bank details as well, just like the requirements for businesses. You need to give them your account name and number, as well as the sort code. 

Details of your monthly income and expenditure will also strengthen your case. Just provide details on your salaries and the usual bills that you pay.

Improving Your Chances

All the information will be processed by the van company to check if they will be able to accommodate your application. They have internal standards to consider so you also need to do whatever you can to improve the chances that you will get approved.

One thing you can do is to submit what’s called a joint application. This applies to people who live in the same residence. What happens here is that they consider the joint incomes of both applicants. If one has a bad credit history and the other does not, the latter augments the former’s shortcomings.

Another option is to get a guarantor with a positive credit history. S/he should agree to shoulder the monthly payments the applicant can’t pay.

If you have extra funds, giving a higher down payment will also make your case stronger. This is because you will then pay lower monthly dues.

As you can see, having a bad credit history means exerting more effort in securing good used van finance deals. So it is always best that you take care of your finances.

There are a lot of things you can do early on. These include paying bills and filing annual returns on time, limiting your loans, and regularly checking your credit reports.

Again, having a bad financial history does not mean you will not get good used van finance deals. You just need to show proof that you can meet their requirements.