Business Car Leasing

If you are applying for vehicle finance as a limited company, partnership, sole trader or LLP, you may be eligible for business leasing.

Occasionally, manufacturers offer special rates for business lease customers only. This can result in a difference in price between business and personal prices. Business car leasing also offers positive tax implications. You can reclaim up to 50% of the rental (for cars) or up to 100% (on commercial vehicles) on a business contract hire agreement.

If you are applying for vehicle finance as a private individual, you may be eligible for personal leasing. Personal contract hire is similar to a business contract hire agreement with the exception of reclaiming the VAT. All personal contract hire prices include VAT.

In some cases, personal leasing may actually be the appropriate option for certain businesses instead of undertaking a business car lease. For example, if you are a self-employed person who has recently just started your own business, you may not have the credit history most funders require for a business lease. In this case, personal leasing may be the better option for you.

The type of leasing contract that is most suitable for you will depend on your individual financial circumstances and what you are looking for from your new vehicle. 

To be granted finance on a business lease basis, you will need to provide three months’ of business bank statements.

For new businesses under two years old, you may not be eligible for a car leasing for business contract. However, you may be able to lease a vehicle on a personal basis instead. 

To find out more, read our guide on Leasing as a Sole Trader.

The annual car tax on your company car will depend on a number of factors:

• The P11D value
• Your income tax percentage rate
• The benefit in kind (BIK) tax banding, which is determined by its CO2 emissions

To work out the annual car tax on your company vehicle, you can use our company car tax calculator.

You are responsible for arranging your own insurance on the vehicle unless you are on a Complete Care agreement. This must be a fully comprehensive insurance policy.

For business lease agreements, the insurance certificate should be in the company name or a director's name. If an employee is required to drive the vehicle, a letter on company headed paper may be requested confirming that the employee is authorised to drive to vehicle and confirming his/her position in the company.

Please note that for business contract hire and personal contract hire agreements, the finance company is the registered owner and keeper of the vehicle.

For more information, read our guide on Insuring Your Lease Vehicle. 

As long as you have a full UK driving licence, are able to afford the monthly rentals and have a good to excellent credit score, you can apply to lease a vehicle from the age of 18, with no upper age limit. You can read more in our Lease Restrictions guide. 

Please note, we are unable to assist businesses who wish to use the lease vehicle for "Hire & Reward" purposes. This includes Taxi, Chauffeur, Driving Schools and Rental companies. Some funders also have additional restrictions in place for business car leasing customers who work in the Motor Trade. Please contact one of our Leasing Consultants for further information regarding this.

A company car is a vehicle provided by a firm for the business and private use of an employee, including the option for an electric car business lease. A company car allowance is a cash allowance added to your annual salary, which allows you to buy or lease a vehicle privately. 

You can read more about the difference between a company car lease and a company car allowance in our Company Car vs Company Car Allowance guide.