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Commercial Vehicle Finance Options

Updated 13 April 2024

Summary
  • Navigating the world of commercial vehicle finance can be complex - there are many options, and the costs vary.
  • Understanding your financing options is crucial if you're considering purchasing a truck, van, or any commercial vehicle and don't want to sink working capital into the transaction.

Key considerations to make upfront include:
  • Tailored solutions are essential: Vehicle finance is very flexible, so ensure you agree to match your cash flow and specific business needs. We suggest prioritising lenders and brokers who understand vehicle finance beyond just being an option within asset finance.
  • Security and deposits: Typically, the vehicle serves as security for the loan. Some lenders may also accept trade-ins as part of the deposit, reducing the need for upfront cash - talk to the lender or broker in detail about what you want to do so you can maximise your assets and minimise borrowing costs.
  • GST and additional costs: GST on the vehicle can often be financed and repaid later, which can aid in cash flow management. Vehicle finance agreements also charge establishment or processing fees, so you'll need to understand these and budget accordingly.
  • Technology and infrastructure financing: Some lenders may provide additional funding for GPS systems or EV charging infrastructure, which can be crucial for modernising your fleet. If this is relevant, be sure to ask what's on offer. 
  • Repayment flexibility: Lenders generally offer flexible repayment structures, such as interest-only payments during slower business periods, helping to ease cash flow demands. If this is important, be sure to ask.

Commercial Vehicle Finance - Who Can I Borrow From?

Asset Finance encompasses a network of specialised lenders and brokers, each dedicated to working with you to secure the most suitable finance solution for your needs. Both lenders and brokers bring expertise in assessing your specific requirements and looking at suitable options to find the right solution. Lenders include:
Brokers include:

Case Studies and Success Stories of Commercial Vehicle Finance

Our examples below help make sense of commercial vehicle finance and what can be available for your business. 

Case Study 1: Efficient Fleet Upgrade
  • Business Profile: Quick Delivery Solutions (Logistics and Distribution), based in Auckland.
  • Challenge: Quick Delivery Solutions needed to upgrade its ageing fleet to more fuel-efficient vehicles to cut operational costs and improve delivery times across urban routes.
  • Solution: The owners approached a broker for a tailored financing solution. The broker assessed their business needs, cash flow, and the potential savings from newer, more efficient vehicles.

Outcome: 
  • Finance Amount: $200,000
  • Term: 5 years
  • Savings: Fuel costs reduced by 20%, maintenance costs down by 15%, overall increase in delivery efficiency by 25%

Benefits: The business could modernise its fleet without upfront capital, preserving cash flow for operational growth. The savings from the new vehicles have significantly offset the monthly finance payments.

Case Study 2: Expanding Service Range
  • Business Profile: GreenScape Landscaping (Landscaping and Horticultural Services), based in Christchurch.
  • Challenge: GreenScape wanted to expand its services to include large commercial projects requiring heavy-duty equipment and trucks.
  • Solution: A lender provided a combination of lease and loan options that aligned with GreenScape's seasonal business, offering payment flexibility during off-peak months.

Outcome:
  • Finance Amount: $120,000
  • Term: 7 years
  • Growth: Service offerings expanded by 40% and revenue growth of 30% within the first two years.

Benefits: The flexible financing structure was crucial for the business during the slower winter months, allowing the management to scale without financial strain.

Frequently Asked Questions

What commercial vehicle finance options are available for everyday businesses?

Finance companies, banks, and brokers are flexible and, for qualifying businesses, flexible to business needs. General options include secured loans, finance leases, operating leases, and hire purchase. Whatever you decide on, it's essential to understand the tax and balance sheet treatment, as well as ownership, given the range of options.

What should I consider when choosing a lender or broker?

You know your business best, so ensure the lender or broker understands your goals. The best lenders or brokers will offer the flexibility of terms, understand your industry, make additional financing for related technology or infrastructure available, and, most importantly, offer cost-effective commercial finance.

How can I ensure the financing solution matches my cash flow?

Cashflow is critical, and commercial finance can be cash-demanding. We suggest working with lenders or brokers who offer customisable payment plans that can be aligned with your business cycles, such as lower payments during off-peak seasons and higher payments when cash flow is stronger.

Can I finance the GST on my vehicle purchase?

Yes, most financiers allow you to finance the GST amount, which you can then claim through your GST returns. This can significantly help with cash flow management.

Estimating the Costs with Our Repayment Calculator

A repayment calculator, like the one below, is an invaluable tool for estimating your monthly payments. It visualises how much you might expect to pay based on the purchase amount, deposit, loan term and interest rate. Remember, calculators offer estimates, and actual loan terms can vary.

​To make sense of it, let's take an example:​ For a truck costing $50,000 with a $10,000 deposit over a 3-year term at a 9.95% interest rate, the calculator can give you an estimated monthly repayment amount. This helps in budgeting and financial planning for your vehicle investment.

Commercial Vehicle Finance Repayment Calculator

Commercial Vehicle Finance Amount
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Interest Rate
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Commercial Vehicle Finance Payment
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Commercial Vehicle Finance Amount
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Disclaimer:
  • The information provided here and in related calculators is for general guidance only. It does not constitute financial advice or a quote. Terms, conditions, fees, and lending criteria apply to any finance option.
  • For a detailed quote and to explore your options further, it's advisable to contact a lender and/or commercial vehicle finance specialist.
  • Each business's needs are unique, and the most suitable finance solution should align with your long-term business strategy and cash flow capabilities.
Related resources:

Business Lending Essentials:
Cash Flow Essentials: