Business Car Leasing

Business car leasing provides companies with a cost-effective way to manage their vehicle needs, offering access to new cars without the significant upfront costs of purchasing. It allows businesses to maintain a modern fleet with fixed monthly payments, helping to budget effectively.

Business Car Leasing Explained

A lease is essentially a long-term rental agreement, offering exclusive use of a car for a set period at a fixed monthly price.

As a business, this is the most cost efficient method of funding the vehicles as it takes advantage of the tax and vat regulations to reduce the whole life running cost of your vehicles and is supported by the buying power of the finance company, to assist in reducing the cost even further.

The greatest cost of running any new car is depreciation, and many new cars will lose more than half their initial value after the first three years of ownership.

The Contract Hire Company reclaims the VAT on the original purchase, which reduces your monthly rentals (which are + VAT). Contract Hire is a very popular choice for VAT registered companies as they can claim back 50% of the VAT on the finance element for cars and generally 100% for commercials (subject to no private use, no exempt turnover and not being on the Flat Rate VAT Scheme).

On contracts with maintenance the VAT on the service element is 100% recoverable. One of the major benefits is that there are no disposal worries as the future value is underwritten by the leasing company. Another benefit of Contract Hire is that it is generally ‘off balance sheet funding’ (subject to legislation change) which means it can improve your gearing ratio (assets to borrowing ratio) and therefore possibly your borrowing ability in the future.

Benefits of Business Car Leasing

Minimum capital expenditure

Accurate monthly budgeting

Improved cash flow

Fixed interest rates

Rentals can be offset against the businesses profits.

Reduced administration

On-going advice and support

Road Fund Licence provided (vehicle excise duty paid) for duration of contract

Optional maintenance package

Optional breakdown rescue cover

Optional replacement vehicle cover in event of breakdown

Optional GAP insurance which provides cover for the shortfall between the outstanding finance and the insurance value if the vehicle is declared a write-off by your insurance company

Disadvantages

Early termination can be expensive

If you do more miles than stated in your contract you will be charged excess mileage for each mile over that stated in your contract

You must look after the vehicle and return it in a well maintained condition otherwise you will be charged for any damage over and above that stated in the ‘Fair Wear and Tear Guide’

You must have fully comprehensive vehicle insurance

We are Balgores, based in Romford, Essex. Our team of experts have worked in the car leasing sector for decades, building relationships with manufacturers across the globe to provide drivers with incredible leasing offers on any and every car.

01708 38 44 51

Business Car Leasing Explained