Nine Benefits of Leasing a Car Through a Business
If you’re a sole trader, partnership or limited company, leasing a car through your business may be a very beneficial decision. Here are nine benefits to choosing business contract hire, otherwise known as business leasing.
Usually cheaper than personal leasing
If you’re a VAT registered business, business contract hire can prove to be significantly cheaper than personal leasing, as you reclaim up to 100% of the VAT back from your monthly repayments.
If the vehicle isn’t used for any private driving, for example, if it’s a pool car for business use only, then you can claim up to 100% of the VAT back.
If, however, the vehicle is used for personal trips as well as business, you can only claim up to 50% of the VAT back. Albeit, that’s still more than you can claim back from a personal lease.
And, if you choose to add a maintenance package to your lease agreement – which we always advise to help give you complete motoring peace of mind – you can claim 100% of the VAT back from your package.
That’s alongside any excess mileage charges you face at the end of your agreement. This can usually be written off as a business expense.
Finally, any car you lease that releases less than 110g/km allows you to claim back 100% against your income. Cars emitting 111g/km or more are able to claim 85%.
£0 deposit option
At Zero Deposit Car Leasing, all our lease cars come with a £0 deposit option. That includes business leasing, too.
So, you can drive your brand-new business lease car away with £0 deposit today.
Improved cash flow
By spreading the cost of your vehicle over the course of 12 to 48 months, depending on your preference, you don’t have to make any chunky upfront payments that may disrupt the business’ cash flow.
Instead, the money you retain, which could be tens of thousands of pounds, can then be used to help strengthen other important areas of the business to help it grow.
Avoid owning a depreciating asset
In the world of business, depreciation is something to be avoided. And it’s the same with your business’ car or cars.
If you choose to buy a vehicle through your business, not only do you have to find the initial funds, which can be difficult in itself, but you’re also more than likely going to lose money on your purchase. That’s because it’s rare a vehicle’s value goes up over time.
By leasing, you can avoid that, as you never own the vehicle. Instead, your monthly payments cover the vehicle’s depreciation while it’s in your possession. And when your contract is up, you simply hand the car back and walk away.
By leasing, you can escape the hassle of trying to sell the vehicle when you’re ready for another and you don’t have the stress of trying to recoup your initial funds.
You always know how much it’s going to cost you
With a business contract hire, your monthly payments are fixed. That means you always know how much you’re going to pay and when.
By having fixed monthly payments, you and your business can budget accurately and accordingly; removing one less worry from your budgeting stresses.
Drive the latest vehicle
Business lease agreements are usually on new or nearly-new cars. That means you get to enjoy the vehicle during its best years.
When they’re newer, cars are more efficient and reliable. It also means you or your employees have access to the latest in safety, style and tech.
Flexible to business needs
A leasing agreement usually lasts between 12-48 months. When it’s up, you hand the car back and you’re free to start another.
Having the option to change your car more frequently is a plus. It gives you the power to choose a vehicle that represents the business’ needs at the time.
So, if you find your current lease to be too expensive, the vehicle or fleet size unsuitable or you’re looking for something a bit fancier, when your contract ends, you can react and make that decision.
With a lease, you’re not tying all your money up into a single asset or assets. And aside from improving cash flow, as we’ve already mentioned, it also means there’s less impact on securing other lines of credit if you need to.
Peace of mind motoring
As we mentioned earlier, with a business lease, you’re able to add maintenance and servicing packages to your agreement.
By doing so, it ensures you or your employees are covered while behind the wheel. And it removes the threat of any nasty repair bills.
Also, as lease agreements are usually on new or nearly-new cars, you can also take advantage of the manufacturer’s warranty.
Ready to find your business lease car?
If you’re now ready to find your perfect business lease car, we can help. Use our handy, in-depth search tool to find the perfect car or fleet for your business.
Alternatively, if you’d like to see which cars are suitable for your business’ credit profile, you can use our free and simple online eligibility checker to find out in minutes. Check Your Eligibility Now.