The benefits of car leasing for businesses

Published 20 July 2019
in Advice
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More and more businesses are discovering the benefits of car leasing and the affordability and freedom that comes with it.

For start-up business this is becoming vital, as business owners aim to use their capital in much more constructive ways. In addition to overall spend control, reducing outgoing costs by leasing a vehicle will help to significantly decrease a company’s overall capital costs – thus allowing a business to focus on investment to drive growth in other areas.  

In challenging political, business and environmental climates, the last thing a well-managed business does, is commit capital unnecessarily. It’s for this main reason that leasing cars more frequently is making greater sense for UK businesses.

Some of the key benefits of leasing a vehicle for a business include:

Avoid commitment to a depreciating vehicle

Through a business contract hire lease, a business won’t actually own the vehicle and therefore won’t be at risk of selling on a depreciating asset when the agreement ends. It is returned to the leasing company who then takes on the risk of the resale.

Vat benefits

If a business is VAT registered and the leased vehicle is used solely for business, 100% of the VAT can be reclaimed when used only for business purposes. Additionally, business owners who use their company car privately as well for business, can recover 50% of the VAT.

Released more cash in your business

Purchasing new cars can eat into company budgets. Through leasing, businesses can pay across fixed monthly installments, helping manage better cash flow.

Upgrade to a new vehicle more regularly

When purchasing a new car for a business, it’s common that it’ll be driven for several years before it is even considered that it may be due an upgrade. The older a car gets, the less reliable it can become and ultimately it can begin to add more costs to a business. One of the major benefits of leasing is that a business can access the latest models much more often.

Talk to us

Pike and Bambridge take pride on being experts in providing independent advice across the automotive industry. We receive questions every day around both business leasing and private leasing across all types of vehicle. If you have any questions or would like to look at purchasing your next vehicle, get in touch with one of the team.