Occasionally, manufacturers offer special rates for business 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.
Business customers also get exclusive extras, such as outsourced fleet administration, that personal customers would not have use for.
In comparison, 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. For example, if you are a self-employed person who has recently just started your own business, you may not have the three months’ business bank statements required by most funders for a business lease. In this case, personal leasing may be the better option. If you’re unsure, your sales consultant will be able to help.
Pick-ups are an exception. Although dealt with by our van specialists, these vehicles, like our lease cars, are readily available to both personal and business customers, provided you are financially eligible.
To be granted finance on a business lease basis, you will need to provide three months’ business bank statements.
If yours is a new business and you are unable to do this, you may be able to lease a vehicle on a personal basis instead.
- 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, we recommend using the HM Revenue and Customs company car tax calculator.
The majority of our customers choose two, three or four year contracts. Five year contracts are sometimes offered, depending on the customer and the finance provider.
Shorter contracts mean you are able to change your vehicle more often, while longer contracts will generally mean cheaper monthly payments. It’s worth noting that if you take a 48 month (four year) agreement, you will be responsible for the MOT and any servicing requirements as stipulated by the finance company in the final year of the contract.
Occasionally 18 month contracts will also be offered. When this is the case, it will be stated clearly on the website; we cannot offer 18 month contracts over the phone.
For personal lease agreements, the hirer obtaining finance must be the main policy holder or a named driver on the insurance certificate.
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.
It’s worth noting that your finance provider will not enter negotiations with your insurance company – this must be done by yourself.
In the event of a total loss, the most important thing to do is contact us. Your sales advisor will be able to give you all the information and instruction you need.
Monthly payments are usually taken one month after delivery of the vehicle on a date set by the finance provider.
If you’re confident that your driving habits are likely to remain unchanged from the previous few years, the difference between the mileage amounts stated on your recent MOT certificates will give you a fair idea of the mileage you’re likely to need.
Alternatively, take a measurement of how many miles you do in an average month and multiply it by 12. Bear in mind any seasonal differences in your driving behaviour that might happen from year to year to make your estimation as accurate as possible.
One of the biggest things to bear in mind when making this decision, however, is your regular driving habits.
Diesel vehicles are fitted with something called a diesel particulate filter (DPF). The DPF is part of the car or van’s exhaust system, designed to clean engine exhaust gasses before they enter the atmosphere. The DPF is designed to clean itself by ‘burning off’ the excess soot particles when it gets hot enough – typically after 30 minutes of driving at around 45mph. If you don’t reach those speeds for long enough, the filter won’t be able to clean itself and a warning light will come on.
Therefore, if you’re typically a city driver or one that doesn’t do a large number of miles in a single journey, a petrol vehicle may be more suitable for you.
Most funders ask for a good to excellent credit score in order to be accepted for vehicle finance. It is worth pointing out that no lender uses your credit score alone to approve or decline you for finance. Often many other factors come into play such as your ability to make regular payments on time and any other debts you may have.
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 customers who work in the Motor Trade. Please contact one of our Leasing Consultants for further information regarding this.
Applying for vehicle finance is much like applying for a credit card or loan. The finance companies will investigate your credit history before making a decision whether to accept your application. The Citizen’s Advice Bureau offers a wealth of information about borrowing money, and what you can do if you have been refused credit.
Visit the Citizens Advice Bureau for more information.
If you have not got a maintenance package and your vehicle needs repair, you must inform the relevant finance company of any incidents. If your vehicle is being serviced, you are advised to go to a local main dealer and use only approved parts. Please consult your leasing contract – this will tell you what you need to do and what the finance company’s requirements are.
Please note, we will only be able to discuss a Transfer of Contract with the person named on the finance documentation and you must have your registration number to hand. Email requests can take up to 3 working days to be actioned so if your request is urgent, please call us.
If your agreement does not include a relief vehicle, a hire car can be arranged through the finance company, often at preferential rates.
Some small and reversible modifications may be permitted by the funder providing your leasing contract but please note that this will be at your own risk and may invalidate the vehicle warranty. You will also need to arrange for removal any modifications without damaging the vehicle before returning it at the end of the contract.
Before making any changes to your vehicle, please speak to your sales advisor. Permission and restrictions will depend on the modification in question, manufacturer and finance provider.
- Moving home or job in such a way that means you are likely to exceed your agreed mileage
- Your financial situation has changed in such a way that you are unlikely to be able to afford your payments (for example, losing your job or bankruptcy)
- You acquire another vehicle and no longer need your leased car
In all of these scenarios, you should contact your finance company to find out what your available options are.
Please note, we will only be able to discuss a Transfer of Contract with the person named on the finance documentation and you must have your registration number to hand. Email requests can take up to 3 working days to be actioned so if your request is urgent, please call us.
Business leasing agreements:
- Contract hire – finance company
- Contract purchase – you/your business or the finance company, depending on the option you choose
- Finance lease – finance company
- Lease purchase – you/your business
Personal leasing agreements:
- Personal contract hire (PCH) – finance company
- Personal contract purchase (PCP) – you or the finance company, depending on the option you choose
- Personal lease purchase – you
Collection is dependent on the finance provider. For contract hire and personal contract hire agreements, the finance company will usually collect the vehicle at the end of the contract.
If a vehicle is pre-registered, you will be entitled to the balance of the manufacturer’s warranty and roadside assistance cover. In the event that the warranty expires within the contract hire period, you will be liable for any repairs or breakdown costs, unless a maintenance package is purchased as part of the contract, in which case repair costs may be covered subject to the maintenance terms and conditions.
Please note that for pre-registered vehicles sold with the balance of the manufacturer’s warranty, an MOT will be required (at the customer’s cost) 3 years from published taxation point, in line with UK law.
