The economics of running an older HGV in the UK have shifted in the last eighteen months, and the shift is now structural rather than cyclical. Three forces have lined up at once: a tougher Direct Vision Standard regime in London, a maturing Clean Air Zone network across the major cities, and a noticeable hardening of shipper requirements on emissions and fleet age. Together they have moved truck renewal from a discretionary capital programme to something closer to operating compliance.
For SME hauliers, the consequence is direct. Fleets that were viable on a five-to-seven-year cycle are running out of road on the older end of that range, and the finance market that used to support gradual renewal is no longer always priced for the new pace.
What changed in October 2024
Transport for London’s Direct Vision Standard moved its minimum required rating from one star to three stars on 28 October 2024. From that date, any HGV over 12 tonnes operating in Greater London either had to hold a three-star rating or fit the Progressive Safe System (PSS), a defined package of cameras, sensors, audible warnings, and side-guard equipment. Operators that received a grace period to install PSS faced a final deadline of May 2025. Penalties for non-compliance run up to £550 per offence. Transport for London publishes the full standard.
The DVS effect is concentrated in London but its commercial weight reaches further. National hauliers cannot run a fleet that is non-compliant in the largest urban market in the country. Any vehicle expected to enter Greater London during its working life now needs PSS or a sufficient star rating before it earns revenue.
The Clean Air Zone overlay
Outside London, Clean Air Zones in Bath, Birmingham, Bradford, Bristol, Sheffield, Tyneside, and Portsmouth either charge older HGVs directly or charge through their Class C and D rules. Older Euro V trucks routinely incur charges in Class C and D zones; Euro VI is the practical benchmark for unrestricted urban delivery work. The full city list is published on the Government’s clean air zone information pages. GOV.UK maintains the active list.
The cumulative effect is that an SME haulier with mixed routes can be paying CAZ charges in three separate cities and DVS penalty exposure in London, against a background of contract work that increasingly requires Euro VI as a baseline.
The new HGV market is shrinking, not expanding
Set against that compliance pressure, the new HGV market actually contracted in 2025. SMMT data shows new HGV registrations down 10.0 per cent year on year to 40,504 units, with declines in tractor units, box vans, tippers, and curtainsiders. Zero-emission HGV registrations more than doubled in percentage terms (up 170.5 per cent to 587 units) but still represent only 1.4 per cent of the new market, around one in every 71 trucks. SMMT publishes the registration data.
That combination, falling new registrations and rising compliance pressure on the existing parc, is unusual. It means the trucks coming off-fleet to meet DVS and CAZ requirements are not necessarily being replaced one-for-one with new units. Used Euro VI tractor units are commanding firm prices because demand for compliant stock outstrips orderly supply.
The financing implication
Two distinct financing problems sit on top of this. The first is at the operator. SME hauliers replacing older trucks need term debt that prices the asset’s working life properly, accommodates PSS retrofit costs where the truck is not being replaced outright, and gives realistic refinance flexibility for the inevitable mid-life rebalancing of the fleet.
The second is at the dealer and manufacturer level. CV dealer networks are holding stock through a market that has slowed at the new end and tightened at the used end. Inventory and stocking lines that respect the slower turn rate, the higher unit values, and the regulatory checks attached to each unit (DVS rating documentation, emissions class, telematics fit) make a real difference to whether stock can be ranged at all.
What good finance looks like in this environment
- Fleet asset finance with tenor that matches Euro VI economic life rather than legacy Euro V cycles.
- PSS retrofit financing as a discrete line, separate from vehicle finance, structured against documented retrofit cost.
- Inventory and stocking facilities for CV dealers and manufacturers that carry compliant stock through a slower market.
- Underwriting that reads operator licence standing, DVSA roadworthiness data, and compliance history as positive credit signals rather than as obstacles.
Where LMC sits
Last Mile Capital provides asset finance for HGV fleets and stocking finance for commercial vehicle manufacturers and importers, with credit work grounded in the regulatory reality of UK road haulage rather than a generic SME lending template. The transport and haulage offering is set out at our transport and haulage sector page, and the funder-facing structure of the book is at for funders.
The compliance pressure is not going away, and a fleet finance facility that does not understand it will reprice itself out of the operator at exactly the wrong moment.
Image: “M42 Motorway: Lorry operating empty of a load” by John Carver, licensed under CC BY-SA 2.0.
