Key highlights
- Both new and used business cars can be financed
- New cars often viewed as lower risk
- Used cars lower the price and initial depreciation hit
- One broker compares indicative options across 80+ lenders
One of the first decisions in a business car purchase is whether to buy new or used. Both can be financed, but the choice affects your rate, your repayments and how the vehicle holds its value. Here is how the two compare.
How does financing a new car work?
A new business car is often the simplest to finance. Lenders generally view a new vehicle as lower risk because its condition and value are predictable, which can support sharper indicative pricing and longer terms. The trade-off is that a new car depreciates fastest in its early years. How that depreciation is treated for your business is best confirmed with your accountant or registered tax adviser.
How does financing a used car work?
A used business car can lower the purchase price and reduce the initial depreciation hit, since much of it has already occurred. Finance is still readily available for used vehicles, though lenders may apply higher indicative rates or shorter terms as the car ages, and some set limits on a vehicle's age at the end of the loan. A well-chosen used car in good condition can still represent solid value for a business.
Should you buy a new or used business car?
The right answer depends on your budget, how long you plan to keep the vehicle and how it will be used. A business covering high mileage might prefer the reliability and warranty of a new car, while a cost-conscious buyer may find a late-model used vehicle more economical. Comparing finance on both against your real numbers is the clearest way to decide.
How do you compare new and used car finance?
Whether you lean new or used, Overdrive Business Vehicle Finance can compare indicative options across a panel of more than 80 lenders through one broker, Simon Kendrick. Ask for an obligation-free quote to see the difference for your situation. The initial check is a soft enquiry that does not affect your credit score, with no obligation to proceed.
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