Business Car Leasing: The Comprehensive Guide

Business car leasing has become increasingly popular over the past 5-10 years. It’s a cost-effective way to drive a brand-new car or an entire fleet. If you’re thinking about leasing a car through your company or for your employees, read our complete guide below to learn how the process works.

What is business car leasing?

Business car leasing lets you ‘rent’ a single car, van or full fleet for a fixed period, making set monthly payments until your contract’s over. Afterwards, you return the vehicle(s).

This is an ideal solution for companies who need frequent work-related transport. You also receive tax benefits for business leasing.

Whether you’re a director in need of a premium BMW or Audi, or are looking for a fleet of vans from Ford or Citroen, we are sure to have the right vehicle for your business. See our business range now or read more to find out how to qualify.

Who qualifies for a business car lease?

You qualify for business leasing if your business is a:

  • Limited Liability Partnership
  • PLC
  • Local Authority
  • Partnership
  • Limited Company
  • Charity
  • Embassy
  • Or you are self-employed

How to get a business car lease?

Here are the six steps to take to get a business car lease:

Step 1: Choose your ideal car

As with personal car leasing, the first step involves picking out the car or fleet you’d like to use for your business.

Our website enables you to search using a wide range of filters, so you can quickly narrow down from the hundreds that are available. You can choose by:

  • Budget
  • Make
  • Model
  • Body type
  • Detailed search (e.g.trim level)
  • In-stock vehicles

You can also search by engine and emissions, which is ideal for businesses who are able to benefit from VAT breaks if certain levels are achieved. For example, as of May 2019 a car emitting over 130/km of Co2 can claim back 85% VAT, or if the engine emits below that threshold, the business can claim 100%.

You may have chosen a few cars you’d like to get a quote for, and the next step requires you to provide more details about the contract. For example, how long do you want to lease the car, and what is the maximum number of miles it will be driven during the contract term?

For an additional cost, you can add on a maintenance and insurance package. This includes:

  • Insurance
  • Servicing
  • Minor repairs
  • Accident management
  • Breakdown cover

You can either complete the quote details on our website or if you have more questions you need answering, call our team who are always available to help.

Step 2: Getting a quote

You may have chosen a few cars you’d like to get a quote for, and the next step requires you to provide more details about the contract. For example, how long do you want to lease the car, and what is the maximum number of miles it will be driven during the contract term?

For an additional cost, you can add on a maintenance and insurance package. This includes:

  • Insurance
  • Servicing
  • Minor repairs
  • Accident management
  • Breakdown cover

You can either complete the quote details on our website or if you have more questions you need answering, call our team who are always available to help.

Step 3: Finance application

Business car leasing requires the company to go through a credit check in order to drive the car away.

This involves us sending off your application details to one of our financial partners who will check your credit rating. They may also request additional information about the business and the director(s) in order to reach a final decision.

The reason for this is for them to ensure the business will be able to continue making the payments for the full length of the contract. The information they may request can include:

  • 3-6 month's bank statements
  • Names/addresses of director(s)
  • Opening balance sheet (if available)

In some cases, you may not be asked to supply any of the above. Although it is better to have the information available, just in case.

If you or your company has bad credit, don’t worry – you may still be accepted. You can find out more about business leasing with bad credit here.

Step 4: Finalising your order

With the credit check completed, you can now finalise the order for your lease car. It is important to read the order form carefully, to make sure all your details are correct and you are happy with the deal you are signing up to.
Your dedicated Account Manager will also take the time to orally verify the contract particulars, to ensure we are ordering the vehicle you require. You can then sign the contract and we will send it off to the supplier for the next stage of the order.

Step 5: Sign off the financial documents

The financial documents are another important part of the process that need to be completed. These can be sent to you via email for you to review in your own time.

All you have to do is read through them, and if all is ok, sign and return them back to your Account Manager. Most of our contracts now use e-signature which speeds up the whole process.

Step 6: Delivery of your car

When assessing which car to order, the Account Manager will be able to provide estimates on how long it will take to be delivered. We will have a clearer idea once the order has been confirmed and the manufacturer informs us of their production schedule.

There are some instances where the car is already in stock, which means it can usually be delivered in as little as a couple of weeks. If it is coming from the factory where it is being produced, it will usually take a bit longer for the delivery to take place. We try to keep our customers up to date as soon as we get clarification from the manufacturer, so you can arrange the start date of your insurance.

What happens when the lease ends?

Towards the end of your lease contract you will be contacted to remind you of the return date of the vehicle. Once the car has been collected, it is then taken back for inspection. This is to check for any damage to the vehicle and to verify how many miles it has been driven.

To get an idea of what will be looked for during the inspection, take a look at our Fair Wear and Tear Guide which outlines the general expectations surrounding the condition of the car.

As you will have noted in your contract, there will be a clause related to the ‘wear and tear’ of the car. The amount you pay on a monthly basis is based on the value at the start of the contract, and the predicted value at the end, which is calculated by agreeing to a mileage limit and assuming the car will be returned without any excessive damage.

If the car is returned with damage that is deemed to be a result of poor treatment, negligent behaviour, or was caused by an unreported accident, then you may have to pay for the repair work.

As the mileage will also be checked, there can be additional costs if the car was driven excessively over the agreed limit stated in the contract.

Once the checks have been completed, you will have the option to either take up a new lease or walk away without any more charges.

Tips for first time business car leasing

If you are thinking about applying for a business lease for the first time, take into consideration the below before making a commitment.

Decide on the right car

The type of business you are will determine the type of car you need.

For example, if you employ salespeople who need to travel to and from client meetings, you can choose between a petrol or diesel-based engine, depending on whether it’s local or national travel.

If you are making deliveries or provide a service that requires tools to be carried from location to location, then a van may be suitable. You can search for a van now or read more about van leasing here.

Also, consider the VAT claims that can be made on vehicles with low Co2 emissions which can be a huge benefit to your business.

Budget for the lease

Figure out how much the business can afford to spend each month on a car. Most often businesses commit to a contract lasting at least two years, so you need to consider this when working out your budget.

Initial Rental

Another cost that has to be factored into business car leasing is the initial payment at the start of the contract. You will be given the choice of offering anything from one, three, six up to 12 months’ worth of instalments.

Look at the business' finances to determine what is affordable. Remember, the more you can pay upfront, the lower the monthly payments will be over the duration of the contract.

Mileage limit

In order to work out the cost of the monthly payments, we will need to know how many miles you expect to drive the car each year. If you underestimate, and the car is returned with excess mileage on the clock, there is a chance you will be asked to pay the difference.
Consider this at the start to avoid having to pay more at the end. Your Account Manager will make you aware of this figure prior to your order.

Insurance cover

Neither fire, theft and accident, nor third-party insurance policies are accepted for business car leasing. You will have to take out comprehensive insurance coverage for the duration of the contract.

Leasing Options offers insured car leasing. It’s popular with many businesses as all factors are covered in one place and it even covers all staff that meet the criteria on one policy.

Whether you need a director’s car or a whole fleet, start looking for your company car lease today. We also have a number of special offers available to help you save money.

Or if you’re not convinced, read about the benefits of business leasing to see the top advantages of how it can help your company.

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