Business car leasing
Whether you want a single business car lease, or a whole fleet, business car leasing can be a useful way of getting new vehicles for your business while protecting your cash flow from a large up-front outlay.
Some car leasing businesses will use the term 'contract hire', while others may say 'operating leases'. All these are different names for the same thing — essentially, you’ll lease the car for an agreed period of time, with a fixed number of miles, and a fixed monthly fee.
When the contract comes to an end, you have to return the car (or begin a new contract). This means you won’t own the car — it can instead be seen as a long-term rental. That way, you can have full use of a new company car for a simple monthly fee instead of an up-front purchase.
When looking to lease a commercial vehicle, there’s a wide selection of business lease cars to choose from. Whether you’re looking for a BMW business lease, Range Rover business lease, or even a Jaguar business lease, we work with a variety of lenders who can help you find the right business lease deals.
Business car leasing doesn’t just work for a single vehicle. If your business needs a number of company cars, fleet leasing might be the right way to do it. It's especially useful for businesses who supply customers, or have sales representatives traveling to customers, and there are many other options where fleet leasing might come in handy too.
Whether you're leasing one vehicle, or a whole fleet, you'll usually have three options when the contract ends:
- Agree on a second lease period (which may have cheaper payments, as the vehicle(s) will be older)
- Agree a new lease and upgrade your vehicle(s)
- Return the car(s) and end the lease
Some business owners may want to establish a fleet as a long-term investment. In that case, hire purchase could be a better solution. Just like leasing, you’ll have monthly payments, but the key difference is that you'll own the vehicles after the last payment has been made. However, because you're spreading a purchase over time (rather than renting the items) you may have to pay the VAT and an initial deposit upfront.
Business car leasing vs hire purchase
Getting a new company car or fleet is a major decision for you and your business, so it can be quite overwhelming to settle for an option.
Leasing and contract hire may be more flexible in terms of your business’s future, because you can upgrade your vehicle when you renew the leasing contract, or simply allow the lease to expire when your business doesn’t need a car anymore. But if you're using vehicles for the long term, leasing may work out more expensive.
On the other hand, it can be difficult to purchase several cars at once. Hire purchase means you can spread the cost, and it may also improve the strength of your balance sheet. Hire purchase also offers your business more control — for example, if you'd like your fleet to be branded or modified, hire purchase gives you the flexibility to do so.
Finally, it's worth mentioning finance leases, which fall somewhere in the middle between business car leasing and hire purchase. Finance leases allow you to delay the decision of leasing vs. buying a company car, so you have time to decide whether you want to keep the car in the end.
That being said, when you think about fleet leasing, you should bear in mind that it comes with additional maintenance costs. Most companies would usually hire a fleet manager to ensure all vehicles are cleaned and taken care of.
If you can’t decide which business car asset finance is best for your business, we can help you find the right lender, and see what your business is eligible for.