Financing used and auction machines
Used and auction plant can be financed, often on the same terms as new kit. The difference is in the checks lenders make and how quickly the money has to move. Here is how to do it without missing an auction deadline.
Can you finance used plant?
Yes, used and auction plant can be financed, usually on hire purchase and sometimes on a lease. Lenders look harder at the machine itself, and at auction the money has to move fast, so get finance agreed before you bid.
- Age matters: many lenders set a maximum age for the machine by the end of the agreement.
- Paperwork matters: serial numbers, an invoice and proof there is no outstanding finance.
- Timing matters: some major auctioneers want full payment within 7 days of the sale.
What lenders check on a used machine
Age at the end of the term
Lenders often limit how old a machine can be when the agreement ends, so an older machine may mean a shorter term. Limits vary by lender and machine type.
Price against market value
The lender wants the price to be in line with the market. They may ask for photos, hours, a service history or an independent valuation.
Make, model and serial number
The serial number or PIN on the machine must match the invoice. Expect to provide hours, year of manufacture and photos of the plate.
No outstanding finance
Lenders check the seller owns the machine outright and it is not stolen. Registers such as TER are used across the plant industry.
Who you buy from
Dealers, auctions and private sellers each come with different invoices, VAT treatment and payment timings. See the table below.
Trading history and accounts
As with new kit, lenders look at how long you have traded and your accounts. Newer businesses may need a larger deposit.
Dealer, auction or private seller
Where you buy from changes the paperwork, the VAT and how quickly the lender has to pay.
| Buying from | Dealer | Auction | Private seller |
|---|---|---|---|
| Paperwork | VAT invoice from the dealer. | Auction invoice showing the hammer price, buyer's premium and fees. | Invoice or bill of sale, plus proof the seller owns the machine. |
| VAT | Usually charged on the price. | Depends on the lot. VAT is usually charged on the buyer's premium. | Usually none if the seller is not VAT-registered. |
| Timing | Flexible. The dealer will usually wait for the lender. | Tight. Some major auctioneers want payment within 7 days. | Flexible, but checks take longer. |
| Who gets paid | The lender pays the dealer. | The lender pays the auction house. | The lender pays the seller once checks are done. |
| Watch out for | Warranty terms and what is included. | "Sold as seen", and fees that may not be financeable. | Outstanding finance, stolen machines and missing paperwork. |
How to finance an auction purchase
- Step 1
Get approval in principle
Before the sale, ask for finance to be agreed in principle up to a maximum amount, so you know what you can bid.
- Step 2
Share the lot details
Send the catalogue link or lot number, serial number, hours and photos so the lender can check the machine in advance.
- Step 3
Set your limit with fees
Work out the hammer price you can afford after the buyer's premium, VAT, fees and transport.
- Step 4
Win, then send the invoice
Send the auction invoice straight away. The clock on the payment deadline starts when the sale ends.
- Step 5
Lender pays the auction house
The lender pays the auctioneer directly, within the deadline.
- Step 6
Collect the machine
Once payment has cleared, arrange collection and transport.
Tax relief on used plant
Used machines are treated differently from new ones for tax:
- Annual Investment Allowance (AIA): covers used plant, so most businesses can still deduct the full cost up to the annual limit.
- Full expensing and the new 40% first-year allowance: apply to new and unused machines only, so they do not cover used or auction kit.
- Hire purchase lets you claim capital allowances as if you owned the machine. On a lease, the lender claims them.
Used plant buyer's checklist
- The serial number or PIN on the machine matches the paperwork
- Hours and service history make sense for the machine's age
- The machine is checked for outstanding finance and against stolen-plant registers
- For lifting equipment such as telehandlers, MEWPs and excavators used for lifting, ask for the latest LOLER thorough examination report
- You have seen the machine running, or have photos and video if you cannot inspect it
- You know the full cost: price, buyer's premium, VAT, fees and transport
Common questions
How old can a used machine be?
It depends on the lender and the type of machine. Many lenders set a maximum age for the machine at the end of the agreement, so an older machine may only qualify for a shorter term. Our broker partner can tell you what is realistic for a particular machine.
Can I finance the buyer's premium and fees?
Sometimes. Some lenders will include them; others finance the hammer price only. Ask before the sale so you know how much cash you need.
I already bought a machine at auction with cash. Can I finance it now?
Often, yes. Asset refinance can release the cash you spent, as long as the machine meets the lender's criteria. It is usually easier soon after purchase, while the paperwork is fresh.
Do I need a deposit for used plant?
Usually. Hire purchase on used kit normally needs a deposit plus any VAT. The amount depends on the lender, the machine and your trading history.
Can I finance machines from overseas auctions?
Some lenders will, but import VAT, duty, transport and paperwork add cost and time. Mention it at the start so the right lender is chosen.
This guide is general information, not financial or tax advice. Plant Hire Finance is a specialist plant hire finance introducer, not a lender or broker. Lenders set rates, terms and age limits, and your accountant can advise on tax. Auction terms vary, so always check the auctioneer's conditions of sale.
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