Commercial vehicle finance options | Don-Bur

Don-Bur can introduce customers to independent third-party finance providers for new trailer and bodywork builds where funding is required. Funding is structured around a clearly defined capital cost per vehicle and the agreed build specification.

We first issue a formal quotation confirming the capital cost of each vehicle. That capital cost forms the basis of any finance proposal. Customers may proceed on a cash purchase basis or request that we obtain funding terms using the quoted figure.

As we are not tied to a single finance house, we can usually source competitive terms across common commercial vehicle funding methods. Finance is provided by independent lenders and is subject to status, credit checks and underwriting.

Although several funding products exist, they fall into two broad structural categories: rental-based agreements and ownership-based agreements. A practical difference between them is who carries the asset value risk, often referred to as residual value or RV risk.

How the process typically works

• We confirm the asset specification and expected delivery date.
• We issue a quotation confirming the capital cost per vehicle.
• If funding is required, we gather basic business information for a finance proposal.
• A third-party finance provider offers terms, subject to status and underwriting criteria.
• Once approved, documentation is issued and the agreement is put in place for delivery.

Any tax or accounting treatment depends on your circumstances. You should confirm treatment with your accountant or finance adviser.

Rental-based structures

Rental structures include operating lease and contract hire. In both cases, the monthly rental is typically calculated using the capital cost and an assumed residual value, or RV. The key feature is that RV risk generally sits with the finance provider, subject to agreed return conditions.

At the end of the contract, the asset is returned and there is no ownership transfer.

Operating lease

Operating lease is primarily a funding arrangement. It provides fixed rentals and a defined return at the end of the term. Maintenance and repair are not automatically included but may be arranged separately.

Contract hire

Contract hire is structurally similar to operating lease but is often positioned as a whole-life rental solution. Maintenance and repair, commonly referred to as R&M, may be included depending on the agreement and asset type. In trailer applications, R&M inclusion varies and is agreed separately.

Ownership-based structures

Ownership-based funding includes hire purchase and, economically, finance lease. These structures are commonly used where long-term retention is required.

Hire purchase

Hire purchase provides a fixed payment profile covering capital and interest. There is no RV structure in the same way as leasing because the intention is ownership. Title transfers at the end of the agreement once any final payment or option fee is made.

Finance lease

Finance lease uses an assumed RV to calculate rentals, but the economics are closer to ownership than a pure operating lease. The customer may have greater exposure to the asset's value performance compared with a rental-based structure.

Don-Bur acts as an introducer to third-party finance providers. Finance is subject to status, credit approval and lender terms and conditions.