What is business car leasing?
Business car leasing refers to the purpose of the lease rather than the payment plan itself. There are a number of leasing options which are suitable for drivers seeking a business lease plan and these may differ from the sort of contracts that might be chosen as a personal lease. The key to deciding on the best type of company car lease for you is to consider your driving habits and think about whether you would eventually like to purchase your vehicle or not.
Plenty of companies choose a financing plan such as contract hire, which is the most popular way of leasing a business vehicle. The car leasing company agrees on a set contract time period or a specified mileage and the lease car is paid for with a monthly charge. Businesses will also pay an initial deposit when signing up to a contract hire payment plan, but there are inclusive benefits to this arrangement. Not only will the business be able to hire a fantastic executive model of their choosing but they also avoid any depreciation costs on the value of their car during the term of the lease. The great thing about this is that you can release capital for your business which would otherwise be tied into a potentially depreciating vehicle. As the leased vehicle remains the property of the car leasing firm, the business is not required to pay maintenance costs on the car as this is included in the pricing structure.
However, the main perk for businesses choosing a contract hire automobile lease is that they are not required to declare their vehicles as an asset, which can be a real bonus when operating a fleet of cars. Furthermore, part or all of the rental costs can be offset against your company’s taxable profits. It is also worth noting that a car leasing company can pass on their buying power to offer fantastic deals on any type of business car lease. If your company wishes, they can agree to employee car ownership schemes which share many similarities with a personal car plan. This form of employee contract purchase will allow companies to control buying terms and details such as maintenance and insurance, thus allowing all the advantages of a company car without the burden of tax.