Guide to business car leasing
Leasing a car for your business is one of the most affordable and convenient ways to drive a brand new vehicle. But how does it all work? In this guide, we'll answer everything you need to know about business leasing and show you why it might be the right choice for your business vehicle.
What is business car leasing?
Business car leasing, sometimes known as business contract hire or BCH, works in a similar way to a personal car lease. In essence, you rent a vehicle for your business for an agreed period for a monthly fee with an affordable deposit.
You have full control over the vehicle and the contract particulars such as the contract length, annual mileage and more. And at the end of the contract, simply hand back the vehicle and choose your next lease, meaning you can access a brand new car every few years.
A business car lease is usually 24, 36 or 48 months, and includes annual road tax, a manufacturer warranty, often breakdown cover and a maintenance package that can be added for a small monthly fee.
What you’ll need to take out a business lease
Below, you’ll find out the typical details and documents you need when applying for your business lease:
- All your business details like name, address, etc.
- The business director’s details
- Business bank account details
- Recent account statements - usually three months
- VAT returns - when applicable
- Personal or director guarantee
- Year-end financial statements
Why choose Vehicle Contracts for business car leasing?
Vehicle Contracts was established in 1999 meaning we can provide expert advice and top-quality service with every business lease. With twenty years in the industry, we’ve built strong professional relationships with manufacturers, dealers, and leading finance and leasing companies.
Our relationships, along with our dedication to volume, mean we can negotiate the maximum discount for some of the most competitive rates on the market.
We average 4.8 out of 5 stars with our customer reviews thanks to our specialist, honest advice with every business lease deal.
Find out more about Vehicle Contracts and our history over on the about us page.
Business car leasing benefits
Leasing a business car has many advantages from driving a brand new car every few years to affordable monthly payments without the risk of depreciation. Check out some of the key advantages below or head to our business leasing benefits guide for more information.
- A business lease may be used for employees for both business and personal use.
- Minimal upfront fees - businesses leases have an affordable upfront payment and low monthly payments.
- If you're VAT registered, 100% of the VAT is recoverable for business use and 50% for business and personal use.
- Your business doesn’t own a depreciating asset - cars lose around 60% of their value in the first three years so leasing takes away the risk.
- You have fixed monthly payments allowing you to budget.
- Drive a brand new car every few years - just return the vehicle at the end of your contract and choose a new lease.
- Vehicles include road tax, a manufacturer warranty and often breakdown cover. You can also add maintenance to cover servicing, tyre replacement and general maintenance
Business leasing considerations
A business lease is the best option for many businesses, however, there are a few things you need to consider.
- Make sure the mileage is enough as you will be charged for exceeding it.
- You can’t modify the vehicle and won’t be able to add decals to advertise your business.
- As you don’t own the vehicle, you must fulfil your contract to avoid paying an exit fee.
- You also can’t sell the vehicle at any point.
- You’re liable for any damage to the vehicle.
How does business leasing work?
First off, you’ll need to check that your business is eligible for a business lease following the above criteria. Then, you should follow the process below:
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Choose your perfect company car - based on your budget, choose a make, model and specification that’s right for you.
- Select the contract particulars - next, you’ll have to pick the details of your contract. This includes the length, mileage, initial payment and whether you’d like to add a maintenance package or any optional extras.
- Agree on your finance deal - once you’ve chosen all of the above, you’ll submit everything to us along with some additional documents and we’ll find an agreement that’s right for your business.
- Sign your documents - once we have everything arranged, we’ll send you the paperwork to sign.
- Enjoy your business lease - we’ll deliver your lease for free to any mainland UK address at a date and time that’s convenient.
- Return your lease and pick a new vehicle - towards the end of your lease, we’ll contact you to find out if you want a new vehicle and arrange the collection of your current one. We’ll aim to deliver a new business lease and collect your vehicle at the same time to make switching as easy as possible.
Who is eligible for business car leasing?
To qualify for a business contract hire agreement, you must fall under one of the following categories:
- A limited company
- A private limited company
- A sole trader
- A partnership
- A limited liability partnership
- A VAT registered company
Which manufacturers are available for a business car lease?
Business Leasing FAQs
Yes, you can take out a business lease with a new business as long as you meet the criteria. It can be difficult to qualify for a finance agreement for a new business so contact us and we’ll look at all your business leasing options.
Yes, as long as you’re a sole trader, have a limited company, are a partnership or you’re VAT registered, you can take out a business car lease.
Yes, Vehicle Contracts can help you out whether you’re looking for one vehicle or a full fleet. We can also offer pool mileage and other fleet leasing benefits. Simply contact us to discuss your fleet leasing options.
No, your mileage limit is set for the duration of your business lease contract.
If you exceed your mileage, don’t worry - there’s a set fee per mile that’s agreed upon in your initial contract.
For example, you could be charged five pence per mile for every mile you go over. So, if you exceed your limit by 1,000 miles, you’ll be charged £50