What is a commercial vehicle?

Approved by the Car Finance Advisory Board

A commercial vehicle - also referred to as a company vehicle or business vehicle - is a vehicle which is used by businesses to either transport goods or fare-paying passengers. It's normally fairly easy to differentiate between a normal vehicle and a commercial vehicle (for example a taxi, a bus or a lorry); however, there are a few instances where people find themselves questioning whether it's a car or if the vehicle will be classed as being for commercial use.

There are some vehicles - such as the Nissan Navara, Toyota Hillux and the Mitsubishi L200 Warrior - which are classed as lifestyle vehicles. Lenders will generally classify these vehicles differently so we would need to check this on an individual basis.

For a lender to establish whether a vehicle is classed as commercial, it will have to be listed as a commercial vehicle on either CAP or Glass's guide. These are two trade valuation companies that provide current and future vehicle values.

The reasons why people opt for commercial vehicle finance is because a company or a sole-trader who are VAT-registered will generally be able to reclaim the VAT when they purchase a vehicle for commercial use.

Are there any weight restrictions on commercial vehicles?

Yes, the maximum weight for a light commercial vehicle (LCV) is 3.5 tonnes.

We're happy to consider financing all LCVs. However any commercial vehicles which are heavier than this will need to be financed by a specialist lender as all of the rules and regulations change when a vehicle exceeds this weight.

Published: 16/05/2016
Last Updated:31/01/2019
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