Business car leasing explained

Business leasing, also known as business contract hire (BCH), allows you to get a brand-new car for your business and your employees without having to pay thousands of pounds upfront. Business lease deals are available exclusively to business owners, sole traders, partnerships, and limited companies. Business leasing can be used for individual vehicles or a fleet of vehicles, depending on how many vehicles your business requires.

The mechanics of business car leasing are similar to personal leasing: you pay an initial deposit followed by a series of monthly payments, except that the deals are available only to businesses.
To lease a car for your business, browse through all the available business lease deals to find the vehicle that best suits your business needs. Once you have a vehicle in mind, you should consider how long you want to lease the vehicle for and how much initial deposit you can pay. You should also consider whether you’d need any add-ons such as a maintenance package as part of the lease. Once you have a rough idea about what you want your leasing contract to look like and how much it’s going to cost you, you should contact us to discuss your options and the application process. Once we’ve discussed the lease deal and the application requirements, you can get ready to submit your business leasing application. You’ll need to get the paperwork ready and arrange finance to apply for the lease deal. Once you’ve sent all the necessary paperwork, and your finance and application has been approved, the car will be yours to use for the agreed period of time. At the end of the lease contract, you hand the car back to the provider.

All businesses can apply for a business lease deal, as long as you’re eligible.
Anyone leasing a car is subject to a credit check. You’ll usually be asked for basic details such as your company’s name, address, contact details, and registration number (where applicable) to carry out the credit check. Please note: funders conduct a hard credit check to assess how likely you are to make the monthly leasing payments. A hard credit check will stay on your report for one to six years, and too many credit checks in a short period of time can affect your credit rating. Learn more here. Most business car leasing companies will also ask you to provide bank statements and/or audited accounts to show you are an operating business, and a proof of address and ID for the main company director.

There are many advantages of leasing a business car instead of buying one. With business lease deals, you can benefit from:

1. Tax advantages

With business lease cars, VAT-registered businesses can reclaim the VAT and make tax savings.If you use a leased van solely for business purposes, you can claim up to 100% VAT. If a leased car is used partly for business use and partly for personal, you can claim back up to 50% VAT. Bear in mind, you can reclaim VAT when you buy a car but only when the car is solely used for business purposes.

2. Minimal capital expenditure for your business

Leasing a car for your business can help spread the cost of getting a brand-new car over the duration of the lease. This allows you to use the capital that you would’ve otherwise spent on buying a car outright for other business projects. This is especially helpful when you lease a fleet of vehicles, as it saves you from spending tens of thousands of pounds in one go.

3. Fixed monthly payments

Business leasing makes it easy for you to keep track of how much money you’re spending with fixed monthly payments. Your monthly payment will include the vehicle excise duty, as well as any extra add-ons such as maintenance packages you opt for when leasing the car making budgeting even easier. And with leasing, you also know how long the business will incur the cost of leasing the vehicle as you have a fixed contract length.

4. Get your hands on a new car

Leasing makes it possible to drive the latest cars on the market without having to spend thousands of pounds at once. Once your ongoing contract ends, you can apply for a new leasing contract and drive the latest cars every few years once your application has been approved.

5. No hassle of selling the car

Leasing takes away the hassle of disposing of the car once you’re at the end of your contract. At the end of your contract, the funder will carry out a routine inspection for fair wear and tear of the leased vehicle. Once all checks have been done, you can hand the car back to the funder and start searching for the next car you’d like to drive.

6. Full manufacturer’s warranty

Most leased car comes with a full manufacturer warranty*. If you face any trouble with your car within the warranty period, you can ring up your lease provider and ask them to help you with the issue. *T&Cs apply. However, there are also a few things to keep in mind with business leasing: 1. You can apply and get a business lease only if you’re a VAT-registered business 2. You won’t be the owner of the car, so you can’t modify or sell the leased vehicle 3. At the beginning of the lease deal, you’ll have to pay an initial deposit along with the first month’s rental payment 4. Once you sign the lease agreement, you’ll be bound to make the monthly payments until the end of the contract. If you wish to end the lease contract early, you will have to pay an early termination fees 5. You’ll be expected to take good care of the leased car. If there’s any damage to the car beyond what’s considered ‘fair wear and tear’, then you may be charged for it

To apply for a business car lease, head to Car leasing on Auto Trader and start browsing through the different car leasing deals. Make sure you’re looking at the business lease deals and not the personal ones if you’re leasing for your company.
Once you’ve found the car you’d like to lease for your business, contact us to finalise the lease contract. Once your application has been submitted and approved by the funder, you can drive the car till the end of the leasing contract.

At the end of the business lease contract, the funder will inspect the car for any damage on the interior or exterior of the car. Funders expect some ‘fair wear and tear’ which comes with the everyday use of the vehicle. However, if the funder notices any major issues with the car, they may ask you to fix it before you hand-back the car. Once the inspection’s complete and the funder is happy, they will arrange a collection date to pick-up the leased vehicle.
And that’s it. Once you’ve handed back the vehicle, your leasing contract ends. After this, you’re free to start thinking about the next car you’d like to lease or buy. We’ve got lots of cars available to lease for your business. Browse through our latest business car leasing deals and get the latest car for a manageable monthly price today.