Commercial van finance for owner-drivers
A commercial van is usually financed as business credit, which is treated differently from a personal car loan. Lenders look at your contract or trading history, your savings and the van itself, and decide case by case. Nobody can promise approval, and the van has to earn more than it costs to run, so budget the whole van, not just the repayment.
The short answer
If you are buying a van to earn a living, expect a different process from buying a car for the school run. The loan is often treated as business credit, the lender asks about your work and savings, and the van is both your tool and the security for the loan.
Three things decide how it goes:
- What the van is for. Business or personal use changes which rules apply.
- Whether your income is proven. A contract, a trading history or a stable wage all help.
- Whether the van pays for itself. Repayments, fuel, insurance, tyres, road user charges and downtime all come out of what the work earns.
This page is about an owner-driver or small operator buying a work van. If you want a general overview of vans, see van finance. For wider business purchases, see business vehicle finance, and for delivery work, courier driver vehicle finance.
Business credit or personal credit
Consumer Protection explains that the Credit Contracts and Consumer Finance Act does not cover credit for commercial or investment purposes. Lenders may ask for a declaration from the customer that the credit is for business. For business lending, the only part of the Act that applies is the protection against oppressive behaviour by lenders, and whether something is oppressive is decided by a court.
What this means for you:
- A van for business use may be assessed as business credit. The affordability inquiries a lender must make on personal loans may not apply in the same way, and your protections may differ.
- A van you also use privately raises a question. Ask the lender how it classifies mixed use and answer honestly. Do not sign a business declaration for a van you will mostly use for family life.
- Read the contract more carefully. If fewer consumer rules apply, the terms matter more, including fees, early repayment and what happens if you miss a payment.
Fair Finance refers car loan enquiries to a panel of lenders. Whether a particular van and purpose fit a panel lender is something the lender decides. Larger fit-outs, fleets and heavier vehicles are often dealt with by asset-finance lenders directly.
Types of finance, in plain words
Different lenders use different names, and the names matter less than the terms. Common structures you will see:
- A secured loan or hire purchase. You pay instalments, the lender holds a security interest on the van, and you own it at the end. Our page on how hire purchase works explains it.
- A chattel mortgage. The common business version, where you own the van from the start and the lender holds security over it. Some lenders use the term and some do not.
- A lease. The lender owns the van and you pay to use it, sometimes with an option to buy at the end. Our page on car leasing covers it.
- A balloon payment. A lump sum at the end that keeps instalments lower. It has to be funded.
We have not listed rates or fees, because rates change and depend on your situation. Ask each lender for the total repayment, all fees and what happens if you sell early.
What a new owner-driver needs to show
Lenders want to see that the van will be earning and that you will be able to keep paying even when work is slow. Typical items:
- ID and proof of address
- Bank statements. Lenders usually want to see income and spending patterns.
- Evidence of work. If you are contracting for a courier or freight firm, a signed contractor agreement or recent statements help. If you are a sole trader, invoices and tax returns help.
- GST and tax records if you are registered.
- Details of the van. Make, model, year, price and whether it is new or used.
- A deposit or trade-in, which reduces the loan.
Business.govt.nz notes that banks may want evidence of continuous work and a savings buffer from contractors. It also says contractors are self-employed, so they set aside their own tax and ACC, and that a vehicle is a significant set-up cost. Our page on car finance for contractors and the self-employed car loan guide cover what lenders ask for when income comes from contracts.
If you have been trading for less than two years, see car finance for the self-employed with less than two years.
Licence class and van weight
Before you finance a bigger van, check that you can legally drive it. NZTA says a Class 1 full licence covers rigid vehicles up to 6,000 kg gross laden weight, while learner and restricted licences have lower limits. Gross laden weight is the greatest of the manufacturer’s stated weight, any weight set by NZTA, and the weight of the vehicle and its load. A loaded van can therefore exceed the manufacturer’s rating.
Practical steps:
- Find the van’s gross laden weight on the compliance plate or in the specifications.
- Compare it with your licence class and any restrictions.
- If you hold a restricted licence, check the table on the NZTA site for your case.
- Our page on car finance on a restricted licence covers the lending side.
A lender may also ask for your licence when you apply, and some require a full licence.
GST and tax
Whether you can claim GST on a van, and how much, depends on your registration and how you use the van. We are not tax advisers. Inland Revenue says you must register for GST if your turnover reaches $60,000 in 12 months or you expect it to, or if you add GST to your prices, and that you can register voluntarily below $60,000. An accountant can look at your own figures. Ask before you buy, because the answer changes what the van costs you.
The costs behind the repayment
A lender sees the repayment. You have to see everything else.
- Fuel. The biggest running cost for many owner-drivers.
- Road user charges. A diesel van pays them. A reported light-vehicle rate is $76 per 1,000 km. Check the current rate on the NZTA site.
- Insurance. Get a quote for the exact van and the use. Business use can cost more than private use, and the lender may require comprehensive cover.
- Servicing and tyres. Vans that carry weight and cover high kilometres wear out faster.
- Signage, racks and tracking. These add to the cost of getting the van work-ready.
- Downtime. If the van is off the road, the income stops and the repayment does not.
- Tax, GST and ACC. Business.govt.nz says contractors do not have ACC deducted and should include it in their rate.
A worked weekly budget (illustrative numbers only)
Say you buy a $38,000 van with a $3,800 deposit and borrow $34,200. The rate, term and running costs are made up to show the method. Your own numbers will differ. Use the calculator for the loan line.
| Weekly item | Illustrative amount |
|---|---|
| Loan repayment ($34,200, 11% a year, 5 years, about $744 a month) | $172 |
| Fuel | $220 |
| Road user charges (about 1,000 km a week at $76 per 1,000 km) | $76 |
| Insurance | $45 |
| Servicing, tyres and repairs reserve | $60 |
| Total before tax, ACC and your own wage | $573 |
The van needs to bring in at least that before you pay yourself. The test is simple: if your contract rate or customer income does not cover it with room to spare, the van is too expensive or the work is not enough.
Business.govt.nz also advises new contractors to allow for sick days, public holidays and gaps between contracts, and to build a savings buffer. A van loan does not pause for any of these.
If you have credit problems
Credit marks make a business van loan harder to place. A few steps that help:
- Check your credit file first and fix what you can. Our page on how to get a free credit report shows how.
- Choose a cheaper van. A smaller or older van lowers the loan.
- Put money down. A larger deposit cuts what you borrow. See how much deposit you need.
- Show steady work. A longer run of contract statements helps a lender see the income.
- Consider a guarantor or joint borrower if that is an option for you. See our page on joint car loans.
Our page on car finance with defaults explains how lenders weigh them.
Red flags
- A contract that does not commit to the volume of work you need. Check what the agreement actually promises.
- A repayment you can only meet in your best weeks.
- A business declaration for a van you mostly use privately.
- A lender who will not show the total repayment, fees and early repayment terms.
- A van with money owing. Do a PPSR check.
- A balloon payment with no plan to fund it.
- Anyone promising approval before they see your income and credit file.
Cheaper routes
A used van with a clean history costs less to buy and to insure. A shorter or smaller start lets you build a record before you step up. A deposit helps. If you are in a real squeeze, free budgeting help and debt advice are listed on our debt help page.
How Fair Finance helps
Fair Finance is a referral service, not a lender. One application and one soft credit check go to a panel of approved New Zealand lenders, so you can see options without a hard check at each one. The lender decides case by case, including whether it will lend on a van and for what purpose. We are paid by the lender only if a loan settles, and that never changes your rate. Use the quick check to start.
Checklist
- Purpose decided: business, personal or mixed, and the lender told honestly
- Licence class checked against the van’s gross laden weight
- Contract paperwork, bank statements and ID gathered
- GST position checked with an accountant
- Fuel, RUC, insurance, servicing and downtime added to the budget
- Weekly income tested against the full weekly cost of the van
- PPSR check done
- Rate, fees, early repayment terms and total repayment in writing
General information only, not financial or tax advice. Rules and products change, so check the official pages below.
Sources
Common questions
Is a commercial van loan a business loan or a personal loan?
It depends on what the van is for. Consumer Protection says credit for commercial or investment purposes falls outside the Credit Contracts and Consumer Finance Act, and lenders may ask for a declaration of the purpose. For business credit the only part of the Act that applies is protection against oppressive lender behaviour. Answer the purpose question honestly.
What do lenders ask a new owner-driver for?
Typically ID, proof of income, bank statements, details of the van and, where you work under a contract, evidence of that work. Business.govt.nz notes that banks may want evidence of continuous work and a savings buffer from contractors. Each lender sets its own list and decides case by case.
Can I claim GST on a commercial van?
That depends on your GST registration and how you use the van, and we are not tax advisers. Inland Revenue says you must register for GST at $60,000 turnover in 12 months, or if you add GST to your prices, and may register voluntarily below that. Ask an accountant about your own figures before you buy.
What driver licence do I need for a commercial van?
NZTA says a Class 1 full licence covers rigid vehicles up to 6,000 kg gross laden weight, while learner and restricted licences have lower limits. Gross laden weight can include the load the van carries, so a loaded van can exceed the manufacturer's rating. Check your licence class and the van's weight before you buy.
Can I get commercial van finance with bad credit?
Sometimes, but credit problems make a bigger loan harder to place. Lenders weigh your credit file, your income and the van. A cheaper van, a bigger deposit or a shorter contract can change the result. Nobody can promise approval.
Do I pay road user charges on a commercial van?
A diesel van pays road user charges, and a reported light-vehicle rate is $76 per 1,000 km. Heavier vehicles and different fuels follow other rules. Confirm the current rate and rules on the NZTA site before you put it into your costs.
See your repayments, then get a fair rate.
One application, one soft credit check, no obligation. We match you to the lender most likely to give you a fair go.