How Do I Lease A Car Through My Business?

How Do I Lease A Car Through My Business?

Leasing a vehicle is well-established as a more cost-effective way of motoring compared to owning the same vehicle. We usually purchase a vehicle through a dealership and take out a finance package to pay for it, but unfortunately cars depreciate in value very quickly and we are never going to get the same price for the vehicle, even if we decide the sell it a few months later. Leasing is a much better way to enjoy your motoring because you are paying a fixed cost each month, which not only incorporates all your motoring expenses – such as road tax and maintenance – but guards against depreciation because you simply return the vehicle at the end of the lease and aren’t stuck with a disposal issue.

There are now 1.6million lease cars on UK roads, and between 20 and 30% of new cars are leased rather than bought. However, there are different ways to lease your vehicle too, and it is important to understand the difference between personal leasing and business leasing and how you can benefit greatly from leasing a vehicle through your business.

What is business leasing?

Business leasing is the process of leasing a vehicle through a business and acknowledging that it isn’t for 100% personal use. This is because a key benefit of business leasing is being able to claim back VAT cost for business use. If you see a vehicle advertised with a personal lease monthly cost and a business lease monthly cost, the business lease will be cheaper because of the ability to claim VAT back.

Currently, if you work for a VAT-registered organisation, you can claim 100% VAT back on a vehicle if it is 100% used for business. However, that is not always the case, and hence you can claim 50% of the VAT back if you use the vehicle for a mixture of personal and business use. You should also be able to claim expenses on business mileage through your employer to help with fuel costs. Industry-wide it is estimated that a business can now save up to 20% on a business lease compared to the equivalent cost of the same vehicle on a personal lease. In line with this, the average saving when choosing a business lease rather than a personal lease with Pink Car Leasing is 16.6%. In most other respects, personal leasing and business leasing are the same; you have the same choice of vehicles, you choose a lease term usually between 12 and 60 months, you can include a maintenance package in the cost and you return the vehicle at the end of the lease and are free to choose another one.

What are the benefits of business leasing?

In addition to the cost savings relating to VAT, business lease deals tend to offer more accommodating mileage restrictions. This is because business use typically requires longer distances and on a more frequent basis than personal use does, so lease terms will reflect that and make allowances for it in the monthly cost.

With a business lease you should also have the support of your employer in terms of maintenance scheduling and costs. Your employer will likely have a fleet of vehicles which they are required to manage, and your vehicle will come under the bracket of a vehicle used for business but not owned by the business. So your employer still has a responsibility to manage that vehicle, and so you should be able to benefit from maintenance packages the employer has negotiated.

How do I lease a car through my business?

The easiest way to do this is to speak to your fleet manager and ask about business leasing. At Pink Car Leasing we have a wide range of vehicles available at exclusive business leasing rates, and you can read about the many benefits of business leasing also. For a business, leasing vehicles means they don’t have a depreciating asset on their books and this helps to free-up cash flow and allows the business to budget better, so you should find that your business is receptive to business leasing and will help you to accommodate it. If you need further advice and guidance on business leasing then contact Pink Car Leasing today, and you can also see the vast range of vehicles available on a business leasing deal here.