At Dick Lovett, we understand that every business has different requirements, and we strive to offer flexible leasing solutions that cater to your specific needs.
Business car leasing - also known as ‘business contract hire’ (BCH) - works in a similar way to personal contract hire (PCH). With this type of car finance, you pay fixed monthly rentals that can also include servicing and maintenance for the period you will be leasing the car.
Business leasing is a cost-effective way for sole traders, partnerships, and limited companies to finance a single car or a small fleet. Better still, VAT-registered companies can claim back 100% of the VAT if the vehicle is used solely for business purposes (or up to 50% if the vehicle is used for both business, and private purposes).
At the end of the agreement, you simply return the car with no additional payments, provided that the mileage is still within the agreed limit and the car is in good condition.
In addition to being Corporate Certified for BMW and MINI, we offer business lease deals and offers on a variety of top automotive brands, including Porsche, Aston Martin, Jaguar, and Land Rover. If you are looking for a reliable and adaptable business car leasing solution, contact Dick Lovett today and let us help you find a leasing package for your business needs.
When selecting a car lease deal, finding a contract that aligns with your business needs is essential.
You will need to decide how much you can afford to pay for a vehicle, or fleet per month and which car or cars suit your business. If you are travelling a lot of miles, you will want something that is fuel-efficient or capable of covering long distances on a single charge such as the BMW iX3, which has a range of up to 285 miles*.
How many miles you expect to cover per annum should be considered. It is important to accurately assess how much you will travel in your lease vehicle to avoid additional mileage fees at the end of the term. A typical business lease contract allows for between 6,000 and 20,000 miles per annum.
You can also choose to include maintenance in your agreement to help spread the cost of servicing, replacement tyres and other repair costs - the VAT on this is 100% reclaimable (for VAT-registered businesses).
At Dick Lovett, our expert Corporate team can help you assess your needs and find the ideal business car lease deal for your specific requirements. Contact us today to learn more.
What is Business Contract Hire and is it different to Business Car Leasing?
Both Business Contract Hire and Business Car Leasing are the same thing and instead of buying a car you simply rent it from a finance company for an agreed period of time. At Dick Lovett we have a team of business leasing and contract hire specialists who can help you choose how long you want the contract for and decide your annual mileage allowance. These criteria then help to determine the amount you will pay each month.
The most obvious difference between buying and leasing is that when you buy a car you own it and when you lease a car, you don’t. You are renting the car from the finance company, so at the end of the contract all you have to do is hand the car back in good condition – just like you would a hire car.
As with any contractual arrangement, you must fulfil your obligations under the lease agreement. If you don’t there’s likely to be more to pay so you should be mindful of what you have committed to and how the car is used. Exceeding the agreed mileage, returning the car early or in poor condition could incur extra charges.
Can I use my company car allowance to lease a car?
Yes, you can use your company car allowance to take out a personal contract hire agreement on a brand-new car of your choice. The monthly rental cost is fixed making it easy to budget for.
What are the tax benefits of business contract hire?
There are a few tax and VAT advantages when leasing a car through your business:
The monthly payment can be offset against taxable profits. How much depends on the CO2 emissions of your chosen car - if your car emits CO2 emissions of 110g/km or less, the full net monthly lease cost can be offset; if your car’s CO2 emissions exceed 110g/km 85% of the net monthly lease cost can be offset.
A car on contract hire is classed as "off balance sheet", which means it isn’t sitting on the books as a depreciating asset.
If your business is VAT registered you can reclaim 100% of the VAT on the monthly rental cost if the car is used exclusively for business. You can also reclaim 50% of the VAT if the car is also used personally and 100% of the VAT on a maintenance package, if you have added one to your contract hire agreement.
If you are self-employed as a sole trader, partner or an LLP member you won’t have to pay company car tax.
If your business is not VAT registered you’re still eligible for contract hire. You simply pay the VAT on the monthly rental cost.
*These figures were obtained after the battery had been fully charged. There is a new test for fuel consumption, CO2, and electric range figures. The electric range shown was achieved using the new test procedure. Figures shown are for comparability purposes. Only compare fuel consumption, CO2 and electric range figures with other cars tested to the same technical procedures. These figures may not reflect real life driving results, which will depend upon a number of factors including the starting charge of the battery, accessories fitted (post-registration), variations in weather, driving styles and vehicle load.
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