ULEZ compliant vehicle finance for vans, cars and lorries

London's ULEZ covers all London boroughs and runs every day of the year except Christmas Day. Cars, vans, minibuses and other light vehicles meet the standard if they are:

• Petrol: Euro 4 or later.
• Diesel: Euro 6 or later.
• Electric or hydrogen: zero emission at the tailpipe, so compliant.

As a rough guide, petrol cars registered from 2006 and many from 2001 meet Euro 4, diesel cars registered from September 2015 meet Euro 6, and diesel vans broadly from September 2016, but the registration date is not proof. Always check the specific vehicle using the TfL vehicle checker on the TfL ULEZ pages before you commit to buying it. Non-compliant vehicles pay a daily charge for each day they drive in the zone; check the current amount with TfL rather than relying on figures quoted elsewhere.

Lorries over 3.5 tonnes and buses and coaches over 5 tonnes are not charged under ULEZ. Instead, London's Low Emission Zone (LEZ) requires them to meet Euro VI, or pay a daily charge. Heavy goods vehicles over 12 tonnes gross vehicle weight also need a free HGV Safety Permit under the Direct Vision Standard to drive in Greater London, which since October 2024 means a minimum three-star rating or fitting the Progressive Safe System of cameras, sensors and warnings. Older trucks may need both a newer engine standard and safety equipment. The TfL LEZ pages set out the current rules. For operators replacing heavier vehicles, our HGV finance page covers how lenders look at trucks and operator licences.

Several English cities, including Birmingham, Bristol, Bath, Bradford, Sheffield, Portsmouth and Newcastle with Gateshead, run charging Clean Air Zones, and Glasgow, Edinburgh, Dundee and Aberdeen enforce Low Emission Zones. The standards are broadly the same as London's, Euro 4 petrol, Euro 6 diesel and Euro VI for heavy vehicles, but the vehicles covered differ: some zones charge private cars, while others only charge commercial and passenger vehicles such as buses, coaches, taxis, lorries and, in some zones, vans. Zones are added, changed and occasionally closed, so check the current position. The gov.uk guide to driving in a Clean Air Zone lists the zones and lets you check a vehicle. Businesses delivering into several cities should plan their fleet to the strictest zone they visit.

For a single van, van finance through hire purchase is the usual route: deposit, fixed payments and ownership at the end. A balloon can lower the payments. For cars, contract hire or a finance lease is common because ownership often matters less and VAT treatment differs. Fleets replacing several vehicles at once often mix agreements, keeping vans on hire purchase and cars on contract hire; our business vehicle finance page compares the agreements side by side.

The vehicle you are replacing is often part of the funding. Options include:

• Part-exchange. The dealer takes it against the new vehicle, reducing the amount to finance. Non-compliant vehicles are worth less in and around zones, so get more than one price.
• Selling privately or to a trader who can place it outside zone areas, which can sometimes achieve more.
• Settling outstanding finance. If the old vehicle is still on finance, the settlement figure must be cleared before it can be sold. Where it is worth less than the settlement, the shortfall has to be paid or, with some lenders, rolled into the new agreement, which raises what you owe.
• Refinancing compliant vehicles you own. If part of your fleet is already compliant and owned outright, asset refinance can release cash for deposits on the vehicles that need replacing.
• Retrofit. Accredited retrofit systems exist for some buses, coaches and specialist vehicles, but rarely make sense for ordinary vans and cars.

Sole traders, partnerships and limited companies can all apply. Lenders look at trading history, affordability and credit record, plus the age and value of the vehicle. Used compliant vehicles from mainstream manufacturers are straightforward to fund; older vehicles get shorter terms. Borrowing of £25,000 or less by sole traders and small partnerships can be regulated consumer credit with additional protections.

The vehicle itself is the security. Directors of smaller limited companies are often asked for personal guarantees, and a deposit may be needed, larger where credit history is weaker or the vehicle is older or specialist.

For a used van or car from a dealer and a business with a clean record, lenders can often decide within a day or two, and delivery follows once documents are signed. New vehicles depend on manufacturer lead times, and electric vehicles with depot charging need installation planned alongside the vehicle. If a zone is about to start charging on your route, or a contract requires compliant vehicles from a set date, start early.

Illustration. A plumbing firm in outer London runs a 2014 diesel van that does not meet Euro 6, and pays the daily charge on every working day. It part-exchanges the van against a used Euro 6 diesel van of around £18,000, with the rest spread over four years on hire purchase. The monthly payment is broadly offset by the charges it no longer pays, and it plans to move to an electric van at its next replacement once home charging is in place. The figures are hypothetical, and each lender sets its own terms.

• Keep the vehicle out of the zone by changing routes or which vehicle covers zone work, if only part of your fleet enters.
• Short-term rental of a compliant vehicle while you decide on electric or diesel.
• Contract hire to hand emissions and resale risk to the leasing company.