Heavy Goods Vehicles
Heavy Goods Vehicles

Expanding Your HGV Fleet


The logistics industry continues to grow, therefore, and your chances of taking advantage of that growth may be substantially improved by expanding your HGV fleet.

Operating margins within the industry remain tight, however, and you are probably going to give serious thought and consideration to the HGV finance options available to you.

As specialists in arranging finance for a wide range of projects and businesses, here at ACF Direct, we suggest the following possibilities for financing any expansion of your HGV fleet:

Operating lease

  • to take advantage of new opportunities in the market, does not necessarily mean that you need to own any additional HGVs to operate – you might lease them instead;
  • an operating lease gains you access to the vehicle or vehicles you need without any capital outlay, but instead, a regular monthly rental payment for the length of the lease agreement – which typically varies between 1 and 5 years;
  • there is no intention of your owning the vehicles and, at the end of the lease, you simply return them to the leasing company – if you still have a need for further HGVs, you may arrange new operating leases;
  • for accounting purposes, your expenditure on an operating lease is treated as an overhead expense and therefore appears in the statement of profit and loss of your company accounts;

Finance lease

  • if it is difficult to tell whether new market opportunities are more temporary or permanent, you may be undecided whether or not to invest in the purchase of new HGVs;
  • in that case, the solution may lie in a finance lease, which gives you exclusive rights to the use of an HGV or HGVs through a longer-term lease agreement;
  • the vehicle or vehicles are purchased on your behalf by a finance company, which leases them on to you for the remainder of their economic working life;
  • At the end of the agreed period of lease, you have 2 main options:
  • Enter into a Peppercorn rental and carry using the goods. This is normally equivalent of one monthly rental per annum.
  • Sell the goods on behalf of the finance company and typically retain 95% of the Sales Proceeds

Hire purchase

  • if you are looking for a permanent expansion of your HGV fleet with vehicles you own, hire purchase remains a thoroughly tried and tested means of raising the necessary credit;
  • through a standard hire purchase agreement, you pay an initial deposit as a down payment – typically the equivalent of around 10% of the purchase price;
  • there then follows regular monthly repayments until the balance has been paid;
  • the amount of your monthly repayments is determined by the purchase price of the vehicle you want to buy, the size of the deposit you are making as a down payment, and the period over which you want the payments spread – typically, from one to five years;
  • from the outset, it is your clear intention to own the vehicle, although it is important to remember that ownership does not pass to you until the final instalment has been paid and the option to purchase fee and that, if you default on those repayments, the hire purchase company may repossess them.

So, there are a number of financing options available, any one of which may help you expand your HGV fleet to take advantage of new opportunities currently opening up in the UK’s logistics industry. Here at ACF Direct, we may help you choose the particular option that suits the specific needs and requirements of your own business.