Let’s face it, if you’re a business owner, you don’t have the time to be endlessly patrolling forecourts, looking for the perfect vehicle for your work endeavours. If your business is a small or medium enterprise, you probably don’t have the resources to purchase outright either. This is where business car leasing rears its head.

There are three different types of business car leasing: business contract hire, business contract purchase and finance lease. For the purposes of a brief explanation, let’s assume you want to lease just one vehicle and we can touch on the subject of managing a fleet once we grasped the idea.

Business contract hire involves taking out a one to five year contract on a vehicle. Repayments are made with a fixed interest rate and you return the vehicle at the end of the contract; there is no option to purchase it.

Business contract purchase does what it says on the tin – you take out a contract in terms of a finance agreement on the vehicle, stick to the monthly repayments and, at the end of the contract, decided what you want to do with it – sell, keep or give it back to the leasing company.

The final option for business car leasing is finance lease. This is where you rent, rather than repay – cost is determined by the value (both present and future) of the vehicle and the length of the lease. Again, you’ll never own the car, but at the end of the lease you’ll have paid off the value of the vehicle, plus interest.

You can read more about the types of business vehicle leasing by visiting car leasing brokers such as TFS and independent finance related sites such as Money Supermarket.

How car lease makes good business sense

Of course, unlike in our example, you’re not just limited to leasing one vehicle. Businesses, from village-based handymen to international corporations, often require a fleet of vehicles and, in these cases, business car leasing is a lot more affordable and manageable in terms of budgeting the cash flow.

Picture this: if your company needed three Transit vans, you could go and spend up to £100,000 in one afternoon, and you’d have your vans delivered as required. Obviously, lots of businesses don’t have that kind of money to hand and, what’s more, they’d never see a short term monetary advantage on their purchases; it will take time for the business to recuperate the funds invested; it will instantly depreciate in value, and you’d still have to pay for servicing and maintenance.

As a more sensible and beneficial option, financing cars on business lease therefore makes good sense because they simply offer a lot more flexibility on budget control within your company than purchase.

For example, business contract hire allows rentals to be offset against your taxable corporation profits; business contract purchase does away with concerns about a car’s depreciating asset, as you can simply walk away at the end of the agreement; and finance lease allows you to spread the cost of your fleet over a longer period of time.

Maintenance and servicing can be included in all three different types of business car leasing, so potential headaches are avoided.

Furthermore, the terms of agreement can be tailored to your requirements in particular the length of the contract, mileage allowance and even the monthly payments by leveraging the initial deposit.

Advantages of leasing a car on businesses contract hire

Simply put, businesses care about three things: image, time and money. Opting in leasing business contract hire cars, you achieve the first and save on the latter.

Image is important and turning up to client meetings and events in a new upgraded model every year or two shows you are progressing and keep on top.

As a new lease contract can be taken out at the end of the old one, businesses aren’t required to spend time making arrangements to sell their old vehicle – they’ll just be provided with a new replacement. Provisions can also be made online, and the new model delivered to the business, hassle-free.

In terms of cost, there are numerous advantages, including claiming back VAT (provided the vehicle is used solely for business purposes), improving your assets to borrowing ratio and, therefore boosting your business’ ability to borrow more in the future.

Popular Business Lease Cars in the UK

Mercedes

Mercedes is a byword for class in the automotive industry and you can be sure to create an impression when you arrive for a meeting in one of the German marque’s models. You can find Mercedes cars on lease to suit any type of business.

The Mercedes A-Class is a compact, sporty, but stylish option, but if you really want to turn heads, lease the new C-Class; the aerodynamic design screams power and style, or arrive in a sporty SLK to impress.

Audi

The name Audi comes from ‘audire’, the Latin for ‘listen’, and you’ll certainly have clients paying attention when you turn up to their offices in an Audi A5.

The manufacturer has a reputation for being dynamic and progressive, and the Audi A3 Hatchback reflects this.

Ford

Fords have improved a long way and are more reliable and steadfast; a handshake before you step back inside your Fiesta or Mondeo will seem even stronger.

In the business world, people like to know they’re in safe hands, and what’s more secure than a brand that has won numerous safety awards over the years?