Business car leasing is an affordable option that gives companies access to brand-new vehicles. It also has lower up-front costs compared to purchasing a vehicle outright and offers significant tax deductions for VAT registered businesses. Company Can Benefit From Business Car Leasing.

But how does it work and is it the right choice for your company? We’ll look at the pros and cons of business lease cars to help you decide.

Reduced Monthly Payments

The monthly payments on business leases are usually lower than the payment for a car purchase. This is because leasing a vehicle in the company’s name avoids putting a personal transaction on the car owner’s credit report and allows for the use of different vehicles for various purposes.

With a business lease, you can deduct costs proportionate to the number of miles driven for business reasons.

This can be a significant saving. Often, VAT can cover more than the cost of the actual car leasing costs. This can make the overall business vehicle budget a lot less stressful.

No Upfront Costs

Leasing is similar to personal contract hire, and it offers a convenient way to drive brand new cars with no upfront costs. You’ll make an initial payment and pay fixed monthly rentals while the car is in use and, at the end of your business lease agreement, you can simply hand it back.

It’s also worth considering that leasing a vehicle in your business name can help you save on taxes.  This is important if you want to maximize the benefits of your vehicle’s ownership. You can then reinvest those savings into your company’s other projects.

Flexible Contracts

The government has introduced a new tax rule that means electric and low-emission vehicles can avoid paying company car tax – another huge benefit for business car leasing!

You will also need to prove that you have sufficient cash flow to afford the monthly payments for the vehicle.

Flexible Mileage Allowances

Business car leasing is a great option for companies who want to upgrade their vehicles often. Because the car isn’t a company asset, there are no worries about selling it or going over kilometre limits at the end of the lease period.

To qualify for a business car lease, your company will need to prove it has sufficient cash flow and revenue to make the monthly payments. The lender will also want to see your company’s credit report and balance sheet.

If your company plans to drive a lot of miles, consider a vehicle with a high mileage allowance. Most lease agreements have a maximum number of miles per year that you’ll need to pay extra for if you go over the limit. However, this is a tax-deductible expense.

No Long-Term Ownership

To avoid this issue, Vanarama recommends a fixed mileage agreement for each vehicle in their BCH deals.

To apply for a business car lease with Vanarama you’ll need to provide identification, business documentation and bank/trade statements needs read more hear.