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A Guide to Business Car Leasing

 Published 8th August 2023
General Guides 

Business leasing is a fleet leasing product that is used for business customers that can help a company to get a single or a whole fleet of cars on the road for business purposes without needing vast sums of money to buy them outright. Although business leasing operates on a similar principle to personal leasing, there are some distinct differences that are tailored to meet the needs and requirements of businesses.

As with personal leasing, businesses can choose from a wide range of vehicles to lease – including cars, vans or even commercial vehicles depending on the needs of the business. The contracts also typically last from two to four years and have agreed mileage allowances and a fixed monthly payment set at the start. One of the key benefits of leasing cars for business purposes is that there are tax benefits for the company which can help the company with its overall tax position. A business lease also offers predictable monthly expenses which makes it easier for companies to budget for their vehicle needs and this is particularly helpful where businesses need to get more than one vehicle on the road at a time for their company needs. Businesses should make sure that they are clear on the terms of the lease agreement and all the services and packages that are or aren't included before agreeing to the terms, and ideally should consult with a financial advisor to ensure their decisions are fully informed.

How is business leasing different to personal leasing?

There are a few main differences between business and personal leasing, which are:

Eligibility: Personal leasing is available to individuals who want to lease a vehicle for personal use, and they are typically the registered keeper and driver of the car. Whereas, business leasing is specifically designed for companies and businesses and the vehicle is intended for business purposes, such as transportation for employees, deliveries or other commercial use.

Tax and finance: Personal lease payments are usually not tax-deductible in most cases, as the vehicle is for personal use - and personal expenses are not eligible for business tax deductions. However, in business leasing, the monthly lease payments are often VAT tax-deductible as a business expense. But the specific tax treatment can depend on the type of business, the tax regulations and whether the vehicle is used exclusively for business purposes so you should check first. Business leases also mean that road tax is provided and there are no depreciation costs to the company.

Vehicle Types: Personal leasing can mean leasing various types of vehicles, including cars, SUVs and occasionally vans where the primary focus is on personal transportation needs and preferences. On the other hand, business leasing covers a broader range of vehicles, including cars, vans, trucks and other commercial vehicles. It is more flexible in terms of accommodating different business requirements, such as cargo space or specialised equipment for commercial use.

Mileage Allowance: Personal leasing agreements often have lower mileage allowances compared to business leases, as personal driving needs may be less extensive. Whereas, business leases usually come with higher mileage allowances, as commercial vehicles tend to cover more distance due to business-related travel.

Possible downsides to business leasing

Before agreeing to a business lease deal on one or more cars, it's also important to consider the downsides of a lease deal – to make sure that you've thought it through. If you need to exit the contract early then there is likely to be an early termination fee and any damage that goes over and above the BVRLA's (British Vehicle Rental Leasing Association) fair wear and tear guide will need to be fixed prior to returning the vehicle or vehicles to avoid additional charges. A certain level of fair wear and tear is expected over the lease term for the age and mileage of the vehicle, but anything that is greater than this level of damage will need to be corrected before the end of the contract. Our own fair wear and tear guide can help you to prepare your business lease vehicles for return at the end of a lease period. A business lease is likely to be given a greater mileage allowance than a personal one, as generally it is understood that commercial vehicles will cover more miles because of business-related travel, however, if your vehicles exceed the agreed-upon allowance it will incur excess mileage fees. There are also prohibitions on modifying vehicles for business purposes unless the conversions are allowed and made as part of the lease prior to delivery. These elements need to be carefully considered before you sign a lease agreement for your business vehicles.

What does a lease include?

A business lease, or business contract hire, will include road tax on the vehicle for the first year, or possibly the entire lease length, depending on the initial agreement and all of the business lease cars from Gateway2Lease come with a warranty. You should check the warranty details for the specific vehicles you've chosen as they can vary from car to car. Our business lease deals can also offer maintenance packages as an add-on to your monthly payment to give you peace of mind that the practicalities of maintaining the vehicles are taken care of. Leasing a fleet of business vehicles will help to free up capital for your company rather than tying it up in a rapidly depreciating asset. When the lease deal is nearing completion, you may have the option to purchase the vehicles at their current market value, or hand them back to the finance provider and start a new lease contract on upgraded vehicles without the hassle of trying to sell second-hand cars or the risks involved with the depreciation of ownership.

Business leasing in six steps

Gateway2Lease understands the significance of a streamlined process when it comes to business leasing. Our goal is to make business leases accessible and straightforward, simplifying the steps for your company's convenience. Here's our refined business leasing process, tailored to meet the needs of your company in six simple steps:

1. Select your ideal fleet:

Embrace the exciting part of the process by choosing the fleet of vehicles that perfectly aligns with your business requirements, mileage needs and preferred contract type. Do you want to reduce the carbon footprint of your company? Do you want to show your clients that you're aiming to be more eco-friendly - as a selling point for your products or services? Why not consider a hybrid or all-electric fleet of cars for your company's needs? Our team of knowledgeable experts is available to assist you in making the best choices for your unique business requirements and goals.

2. Receive a comprehensive business quote:

You will receive a detailed written quotation for your business lease. Take the time to review it, ensuring it fits well within your financial parameters and meets your operational demands. Once you're content, we'll proceed with the credit proposal, initiating credit checks with the finance company.

3. Confirm your order:

Once the finance credit checks are complete, you'll sign a vehicle order form, which finalises all vehicle details, trim levels and approximate delivery times. Your signed form will set the wheels in motion for the factory order or the release of your selected stock vehicles.

4. Complete the finance documents:

Expect to receive all of the essential finance documents via email, including a payment schedule, direct debit mandate and the necessary terms and conditions. Simply sign and return them to us.

5. Delivery arrangements:

Rest assured, we'll confirm the delivery date and, as soon as possible, provide you with registration numbers for insurance purposes - facilitating a seamless process for your business.

6. Effortless delivery:

On the delivery day, your new fleet of vehicles will be delivered directly to your business premises. You'll be greeted by a professional representative who will gladly answer any queries you may have. Your business is now free to explore new horizons, putting your brand-new fleet to the test!

At Gateway2Lease, we strive to make business leasing a hassle-free experience, enabling your company to focus on its core operations while enjoying the benefits of a top-notch fleet. Let us be your trusted partner in business leasing, delivering convenience, efficiency and driving success for your enterprise.

Support from Gateway2Lease throughout the process

With decades of experience in providing tailored solutions for satisfied clients, we are confident in our ability to secure the perfect business lease deal for your company. Our dedicated team is just a phone call away, ready to offer ongoing support and expert guidance throughout your contract term. We take pride in guiding you every step of the way, ensuring a seamless journey to accessing your ideal business fleet.

For any enquiries or further information, you can find many frequently asked questions answered on our website. Additionally, our comprehensive guide to business leasingwill provide you with valuable insights.

To embark on the journey towards building your dream business fleet, get in touch with us today. Why not call our dedicated team on 01299 407 360. We look forward to discussing your business leasing options and assisting you in making the best choices for your company's transportation needs. Let us help you drive your business forward with a fleet that meets your aspirations and elevates your corporate image.

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