Working out what a van will cost on finance involves one thing a car calculation does not: VAT. A commercial vehicle is normally quoted to a business excluding VAT, the VAT treatment differs between hire purchase and a lease, and whether you can recover it depends on your own VAT position. Get that wrong and two quotations that look like they differ by a fifth are actually the same deal.
Establish whether the figures are with or without VAT before comparing
A van priced to a business is usually shown excluding VAT and a van priced to a consumer including it. A quotation that omits which it is makes every comparison meaningless, because the difference is a fifth of the number. Ask for both figures in writing and make sure the deposit, the instalment and the total amount payable are all on the same basis.
On hire purchase the VAT lands at the start, on a lease it lands on the rentals
Hire purchase treats the business as buying the van, so the VAT on the purchase price falls due at the outset and can usually be recovered subject to the business's own VAT position. On a lease or contract hire the VAT is charged on each rental instead. That changes the cash flow completely even where the headline cost is similar, and it is a question for the business's accountant rather than for the finance desk.
Business van finance calculator estimates miss the guarantee
Any estimate needs the amount financed, the term and the rate, and on a van it also needs to know whether the agreement will be regulated. An agreement with a limited company or with a sole trader wholly for business use can fall outside consumer credit, which means no fourteen-day withdrawal, no statutory early settlement rebate and no voluntary termination. Those absences are not in the monthly figure and they are worth more than a percentage point.
Compare the total amount payable, on the same van
The only figure that compares two quotations honestly is the total amount payable over the whole term, on the same vehicle, the same deposit and the same term, with VAT treated the same way in both. Every regulated quotation states it. On an unregulated business facility ask for it explicitly, because there is no rule compelling the lender to volunteer it.
Questions people ask about van finance calculator
Can I recover the VAT on a van bought on hire purchase?
Usually the VAT on the purchase price falls due at the outset and is recoverable subject to the business's own VAT position and the extent of business use. Confirm it with your accountant before signing, not after.
Does a van finance quotation include the VAT on the deposit?
It depends how the quotation was built, which is exactly why you should ask. On a business quotation the deposit is often shown excluding VAT while the VAT is payable separately at the start.
Is the term shorter on a van than on a car?
Not inherently, though funders look at age and mileage at the end of the agreement and commercial mileage is higher, so an older or high-mileage van is offered a shorter term.
Why is my quotation different from an online estimate?
Because the rate you are offered, the fees, the VAT basis and the exact term all differ from the assumptions. Use an estimate to compare structures and the funder's own quotation to decide.