Business car leasing

How does business car leasing work?

Ideal for companies of all sizes, business car leasing offers tax advantages, fixed monthly costs and flexibility. If you are a fleet manager, employee or director you can select a car, which meet your exact requirements.

You can set your own mileage (usually 5,000 - 30,000 per annum), initial rental (or deposit) and either include a maintenance or service package too.

Benefits of business leasing

Affordable, bespoke lease offers

Create a customised leasing contract on an EV you love for an affordable, cost-effective leasing price.

Simple, hassle-free leasing

No need to stress with our straightforward leasing process that gives you the confidence to lease every 2 – 4 years.

Award-winning customer service

Our team go above and beyond to make sure you receive a solution that meets your needs and requirements.

How does leasing work for a company car?

Our straightfoward business car leasing process

1

Choose a car which fits your business needs from our top electric lease deals

Select your contract length, mileage, initial rental and mainteance to suit your needs

Talk to our business car leasing specialists and once approved, arrange delivery to your home or business premises

Who is business car leasing for?

Business car leasing is for a range of businesses. For sole traders and partnerships, as there is no separate legal entity, you are ultimately responsible. Many finance companies will require your annual turnover for the last trading year, annual cost of sales and annual expenses.

With a limited company (Ltd), the lease is between your company and the leasing company (known as lessor and lessee). Many finance companies will check your public records.

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What is business contract hire?

Business contract hire is an operating lease.

As the name suggests, this is a fixed contract between your business and a leasing company to use a new vehicle over 2, 3 or 4 years, with the understanding that the vehicle will be returned at the contract end.

Above all, contract hire is an alternative to purchasing an EV and is not a short-term solution like subscription and flexi-lease.

Pros and cons of business car leasing

If you are thinking car leasing, here are some important points to weigh up.

Pros

Low initial rental (no deposit) options available – the initial rental is not a refundable deposit.

No depreciation concerns – contract hire and leasing is a usership product.

Cost certain – if you include a funder-maintained package, then all the normal running costs of servicing, maintenance, tyres and breakdown are included for the duration.

Leasing is a tax efficient product – monthly rentals can be offset against taxable profit. If you are VAT registered, you can claim up to 50% of the finance rentals and 100% of the maintenance rentals.

Cons

You won't own the vehicle - this is not suitable for those businesses who wish to own a vehicle because contract hire and leasing is not an ownership product.

You will be charged for damage - this applies to any damage or issues that are not acceptable under the BVRLA’s Fair Wear and Tear Guide.

Excess mileage charges – if you go beyond the contract mileage maximum, your business will be charged.

Early termination charges – as leasing is a fixed term contract, if you want to change, upgrade or just return the vehicle then you have to undertake a set process.

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What are the different types of business car leasing?

There are three difference types of business car leasing that you should consider.

Finance Lease is an operating lease with accounting treated like contract hire. It involves a predetermined final rental/balloon paid to the finance company at the end. This allows customers to build equity in the vehicle and retain it when selling to a third party.

Pros include low initial deposit options, possible maintenance packages, VAT reclamation, flexible contract termination, and no damage/excess mileage charges.
Cons include market risks, potential car depreciation, and the obligation to sell to a third party (cannot purchase the vehicle).

Contract Purchase is a purchase-based agreement where the business makes payments towards vehicle ownership. It includes a guaranteed residual value/final payment, providing options to purchase the vehicle, return it, or refinance the final payment.

Pros: deductible purchase cost via capital allowances (100% for zero-emission EVs), flexible contract terms, possible funder-maintenance package, and contract end flexibility.
Cons: upfront VAT payment impacts cash flow, and some manufacturers offer lower discounts.

Hire Purchase is a common car finance option available for both new and used cars. It involves paying a deposit and fixed monthly payments over a contract period to own the vehicle (with an option to purchase fee).

Pros: fixed monthly payments, full cost claimed against tax exposure (100% for 0 g/km emission EVs), vehicle ownership at contract end, and flexible lending criteria for weaker accounts or credit.
Cons: requires significant deposits, higher monthly payments compared to leasing due to discounts and terms, and bears the risk of vehicle depreciation for the company.

Benefits of leasing an electric car for your business

Because electric cars are zero-emission, 100% of the rentals are allowable against tax.

For a car emitting 51g/km of CO2 (or higher), only 85% of the rentals are allowable - this is known as lease rental restriction or rental disallowance.

If you are VAT registered, you can claim up to 50% of the VAT on the finance element for a company car with private use, plus 100% of the VAT on any maintenance aspects of the rental. But note that for a car with CO2 emitting 51g/km of CO2 (or higher), the unreclaimed VAT is restricted to 85% too.

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What happens at the end of your lease?

At the end of your lease the car is usually returned to the finance provider. For any companies concerned about the collection process, or standards, the industry ombudsman - the BVRLA - has put standards in place to regulate this. For more information visit the BVRLA returning your leased vehicle guide.

Electric Vehicle Certificate^TM

“We’ve created the EVC^TM, along with our expert partners, to provide you or the business with the key details required as part of choosing your perfect EV. Everything you need to know from the UK’s leading EV leasing broker in one place.”

- Rob King (MD)

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