What is Business Car Leasing?
Business Car Leasing which is commonly referred to as Contract Hire or BCH, is available to business owners, sole traders, partnerships and limited companies.
With fixed monthly fees and no unforeseen hidden extras, business car leasing allows you better control over your business’s automotive outgoings.
Business leasing offers many benefits including tax advantages, the option to renew regularly, and can include maintenance costs.
There are two types of Business Contract hire: Non-regulated (limited companies) and regulated (partnerships and sole traders).
- Full Manufacturer’s Warranty
- Road Tax
- Maintenance Package (if selected as part of the contract) including all servicing and maintenance.
- Free UK Delivery
What are the benefits of Business Contract Hire?
- Low Initial Outlay
- Improved Cash Flow
- Fixed Payments
- Option to include maintenance
- Road Fund License Included
- Full Manufacturers Warranty
- A brand new vehicle every 2-5 years.
- Fully bespoke contract, term and mileage – discussed, developed and tailored to your needs and budget.
- Contract hire removes depreciating assets from your company’s balance sheet,
- If the car is used only for business, you can recover up to 100% of the VAT. If there’s some private use, 50% can still be reclaimed.
- 100% of VAT on a maintenance package can be reclaimed.
Considerations/Disadvantages of Business Leasing
- You must return the vehicle in a well-maintained condition. Any damage that occurs beyond the industry standard known as BVRLA Fair Wear and Tear Guide will incur charges.
- Early termination fees apply if you terminate the lease early.
- If you drive over the agreed mileage limit, an excess mileage fee (charged per mile) will be charged and is outlined in your agreement.
- Vehicle must be insured with full comprehensive cover.
- You will never own the vehicle, nor is there is an option to buy it.
Am I eligible for a business lease?
As part of leasing a vehicle, your business will need to undergo a credit check.
There are certain criteria, which need to be met in order to qualify for a business car lease contract:
- You must be a sole trader, partnership, Ltd or PLC
- You must be able to provide bank statements and/or audited accounts
- You need to produce proof of address and proof of ID for the main company director
- You should have a good credit rating (each application uses different criteria so we can't advise on specifics with regards to credit ratings)
Company Car Tax
If you use your business vehicle for personal use, including using your vehicle to drive for your daily commute to work, then you will have to pay Company Car Tax. You can use the HMRC Company Car and Car Fuel Benefit Calculator by clicking here.