How to get HGV finance the right way

If you need to update or expand your HGV fleet, then the chances are you are going to need some form of financing to assist.

Here at ACF Direct, we have a range of options open to you. We’ll examine those briefly here.

Hire Purchase (or “HP”)

This is one of the most familiar forms of finance, in both the commercial and private finance worlds.

It has been around for a long time now and that is testament to both its simplicity and its fitness for purpose for individuals and companies.

It works very simply:

  • a provider of funds purchases a vehicle to your specification. You will select the type of HGV you need but the finance provider will typically perform their own checks to ensure that the price you are paying is appropriate for the vehicle concerned;
  • they will remain the legal owner but you will be registered as the vehicle’s legally authorised keeper. That allows you to use the truck as if it were your own;
  • each month you will make a typically fixed sum repayment covering the capital the lender has advanced plus a component of the interest charged on the HGV finance;
  • once you make your last payment the vehicle becomes legally yours, as the funder transfers title, and for the duration of the agreement you benefit from capitalising the asset on your balance sheet.

Do note that until you make that final payment, it would be illegal to sell the truck concerned (without the owner’s permission).

An operating lease

This has some similarities to HP but also some extremely important differences.

It typically works as follows:

  • the provider of finance purchases the HGV on your behalf, almost exactly the same as in the case of hire purchase above;
  • they will then lease you the vehicle for a specified term. During the term, you will pay a fixed monthly sum and you can use the truck as part of your own fleet;
  • once the term ends, the HGV is returned to the leasing company and you have nothing more to worry about;
  • as the total cost of the purchase is typically not being recovered from you, your monthly outgoings may be lower than would be the case in some other options;
  • against that, at the end of the term you will not have an owned asset;
  • the monthly payments are taken into your profit and loss account, as a standard business expense.

This approach has its advantages and disadvantages over others. There may also be tax and “business standing” pros and cons that it might be advisable to consult an accountant about, in order to see whether they will be a pro or con in your particular business context.

A finance lease

This is another option that we might be able to assist with.

Conceptually, it is similar to an operating lease as outlined above. The main differences are:

  • typically the whole of the vehicle’s cost will be used as a basis for calculating your monthly repayments over a variable term;
  • that may increase your monthly repayments over an operating lease. However, taxation advantages and potential future attractive vehicle procurement options might make this route attractive for some.

Once again, it may be advantageous to discuss the advantages and issues associated with this type of finance with your accountant.


Heavy goods vehicles are expensive.

It is therefore important that you select a financing option that is optimal for your company’s position.

In that respect, there is no “one size fits all” solution. In order to be more specific about what kind of finance might be particularly suitable in your situation, we would need to discuss your business in a little more detail with you and your accountant, if you considered it appropriate.

Why not contact us for more information?