Dilip Nathwani, Relationship Director at Lombard, has extensive experience in the transportation sector and explains the various forms of finance available.

Not sure what form of finance is best for you?

You can also read the audio description for this video below.

Which form of finance is best for truck purchases: hire purchase, finance lease or operating lease?

There are a number of asset finance options available. Which one is ‘best’ will depend on a customer’s circumstances. We will work with each customer to find what will work for them whether this is hire purchase, finance lease or operating lease.

For example, smaller companies may find that hire purchase is the most effective option for their truck purchases. It is a straightforward payment-by-instalment product where the customer ultimately owns the asset. Payments can be structured to fit cash flow needs, for example regular payments can be reduced by including a lump sum payment (often referred to as a ‘balloon payment’) which reflects the assumed value of the asset at the end of the agreement. Businesses can claim the available allowances and offset the interest charges against trading profit.

On the other hand in some, but not all cases, larger businesses may use an operating lease for truck purchases. Rentals are based on the value of the asset over the period required and, as a result, can be linked directly to the revenue generated.

Unlike a finance lease, rentals will not recover the full cost of the asset but a business is protected from this risk by a guaranteed residual value (sale price) at the end of the term.

Security may be required and product fees may apply.

Available finance products for commercial transportation

Hire Purchase

Own your asset while spreading the cost.

  • Total control – the asset is all yours when the agreement ends
  • Easier budgeting – flexible repayments help you budget and manage cash flow
  • Interest choices – choose fixed or variable interest to suit your needs

Security may be required and product fees may apply.

Find out more or Contact us direct

Finance Lease

Enjoy the benefits of ownership without potential downsides.

  • Low upfront costs – for a small outlay, the asset is yours to use straightaway
  • Keeping things flexible – we can tailor your payments to match your cash flow
  • Interest choices – you can choose between fixed and variable interest options

Security may be required and product fees may apply.

Find out more or Contact us direct

Triple Choice

Giving you flexible choices when your agreement ends.

  • Own your asset – pay off a balloon payment and take ownership of your assets
  • Stay flexible – triple choice enables you to reschedule your balloon payment
  • Return it – we guarantee the stated end of term balloon payment level

Security may be required and product fees may apply.

Find out more or Contact us direct