Tractor Finance

Q: Can I finance a used tractor?

Yes, used tractors can be financed, supported by a strong domestic and export used market that supports residual values well. Lenders will want to see the tractor's hours run and general maintenance history, since rising maintenance costs on an ageing tractor are the main thing that drives replacement, alongside many farms planning renewal around when a tractor comes off warranty. A tractor bought through an established agricultural dealer with service records is generally easier to finance than a private sale.

Q: What deposit do I need?

Hire purchase typically asks for a deposit of around 10 to 20% of the tractor's cost, with the balance spread over the agreed term and ownership passing to you at the end. A finance lease or operating lease usually needs no deposit, since the lender's security is the tractor itself, which some farms prefer to keep cash free ahead of the farming calendar. The deposit level also depends on whether the tractor is new or used, and on horsepower, a large high-horsepower tractor typically represents a bigger facility than a compact model.

Q: How quickly can I get tractor finance?

Most tractor finance is approved within 24 to 48 hours once the lender has your application, the tractor or dealer quote, and basic company details such as recent accounts or bank statements. A used tractor from an established dealer tends to move fastest through approval, while a bespoke new specification can take slightly longer as the lender reviews the full quote. Having your paperwork ready before applying is the main thing that keeps the process quick.

Q: Are there seasonal payment options?

Yes. Because a tractor is usually the single biggest machinery purchase a farm makes and farm income is seasonal, most tractors are bought on finance structured around the farming calendar rather than paid for in cash or on equal monthly instalments, with repayments weighted towards harvest or other key income months instead. This applies whether the tractor is for a smaller compact operation or a large arable enterprise, since both have income concentrated at particular points in the year. It is worth raising this with your broker at the application stage.

Q: Is VAT charged on tractor finance in the same way as buying outright?

If your business is VAT registered, VAT is generally charged in a similar way to an outright purchase, though when it falls due depends on the finance structure. Hire purchase treats the tractor as a purchase from the outset, so VAT is typically due upfront and usually reclaimable on your next return, while a finance lease charges VAT on each rental payment as it falls due instead. It is worth confirming the exact treatment with your accountant before choosing between the two structures.

Q: What happens if I want to sell or part-exchange the tractor before the agreement ends?

The tractor remains the lender's security until the agreement is settled, so it cannot be sold or part-exchanged without first clearing the outstanding balance, usually done from the sale or part-exchange proceeds. This is common practice given how many farms plan renewal around hours run or warranty expiry, and most lenders will provide a settlement figure on request and roll any shortfall into a new agreement for the replacement tractor.

Spread the cost of tractors from £20,000 to £350,000+ with flexible finance options. HP, lease, or refinance

Can you finance a tractor?

Yes, tractors are financed as a standard asset purchase, usually on hire purchase or a lease, with the machine itself acting as the security. UK prices typically run £20,000 to £350,000, and most deals are written over 12–84 months with a deposit of around 10–20%. Decisions typically take 24–48 hours. Used machines are financeable too, usually with a shorter term.

Typical Cost

£20k – £350k

Approval Speed

24–48 hours

Same-day for < £100k

Rates From

4.2% APR

What would a tractor cost per month?

Tractor price (ex VAT) £85,000

Deposit 10%

Agreement term 60 months

Annual interest rate 9%

Balloon payment £0

Your estimate

Indicative only. Not a quote and not an offer of finance.

Pre-filled with a typical tractor price. Indicative only, not a quote.

Finance options

Hire Purchase (HP)

Rate: From 4.5% APR
Term: 12–84 months
Deposit: 10–20%
Ownership: Yours at the end
Best for: Farmers wanting to own the tractor outright

Finance Lease

Rate: From 4.2% APR
Term: 12–84 months
Deposit: None required
Ownership: Return or buy (balloon payment)
Best for: Tax-efficient, claim 100% of payments against profit

Operating Lease

Rate: From 4.9% APR
Term: 24–60 months
Deposit: None required
Ownership: Return at end
Best for: Always run the latest model. Off balance sheet.

Representative example

On a purchase price of £85,000: a 10% deposit of £8,500, then 48 monthly payments of £1,793 at 5.9% APR representative (fixed). Total amount payable £94,564, including the deposit. The rate you are offered depends on your business and the asset.

Machine or specification	Guide price	Type
John Deere 6R 150	£80,000 – £120,000	Utility Tractor
New Holland T7.270	£110,000 – £170,000	Row Crop Tractor
Massey Ferguson 5S.135	£65,000 – £90,000	All-Purpose Tractor
Kubota M7-173	£85,000 – £130,000	Premium Tractor

Tax benefits

Tractors qualify for Annual Investment Allowance (AIA), letting you deduct the full cost from taxable profits in year one, up to £1,000,000. HP agreements allow capital allowances. Lease payments are fully deductible from farming profits.

Bad credit?

Some specialist lenders consider businesses with imperfect credit histories. You may need a larger deposit or personal guarantee, but options may be available. Fundably may use a soft credit check for matching, which does not affect your credit score. A hard check may happen if you choose to proceed with a lender.

Frequently asked questions

Can I finance a used tractor?

Yes, used tractors can be financed, supported by a strong domestic and export used market that supports residual values well. Lenders will want to see the tractor's hours run and general maintenance history, since rising maintenance costs on an ageing tractor are the main thing that drives replacement, alongside many farms planning renewal around when a tractor comes off warranty. A tractor bought through an established agricultural dealer with service records is generally easier to finance than a private sale.

What deposit do I need?

Hire purchase typically asks for a deposit of around 10 to 20% of the tractor's cost, with the balance spread over the agreed term and ownership passing to you at the end. A finance lease or operating lease usually needs no deposit, since the lender's security is the tractor itself, which some farms prefer to keep cash free ahead of the farming calendar. The deposit level also depends on whether the tractor is new or used, and on horsepower, a large high-horsepower tractor typically represents a bigger facility than a compact model.

How quickly can I get tractor finance?

Most tractor finance is approved within 24 to 48 hours once the lender has your application, the tractor or dealer quote, and basic company details such as recent accounts or bank statements. A used tractor from an established dealer tends to move fastest through approval, while a bespoke new specification can take slightly longer as the lender reviews the full quote. Having your paperwork ready before applying is the main thing that keeps the process quick.

Are there seasonal payment options?

Yes. Because a tractor is usually the single biggest machinery purchase a farm makes and farm income is seasonal, most tractors are bought on finance structured around the farming calendar rather than paid for in cash or on equal monthly instalments, with repayments weighted towards harvest or other key income months instead. This applies whether the tractor is for a smaller compact operation or a large arable enterprise, since both have income concentrated at particular points in the year. It is worth raising this with your broker at the application stage.

Is VAT charged on tractor finance in the same way as buying outright?

If your business is VAT registered, VAT is generally charged in a similar way to an outright purchase, though when it falls due depends on the finance structure. Hire purchase treats the tractor as a purchase from the outset, so VAT is typically due upfront and usually reclaimable on your next return, while a finance lease charges VAT on each rental payment as it falls due instead. It is worth confirming the exact treatment with your accountant before choosing between the two structures.

What happens if I want to sell or part-exchange the tractor before the agreement ends?

The tractor remains the lender's security until the agreement is settled, so it cannot be sold or part-exchanged without first clearing the outstanding balance, usually done from the sale or part-exchange proceeds. This is common practice given how many farms plan renewal around hours run or warranty expiry, and most lenders will provide a settlement figure on request and roll any shortfall into a new agreement for the replacement tractor.

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Guides and resources

What Is Asset Finance? HP vs Leasing Operating vs Finance Lease Best Asset Finance Companies Close Brothers Review Lombard Review

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