How to get a business car lease

Date Posted 14th August 2022
Read Time 5 min read

A business car lease or business contract hire is available to sole traders, partnerships and limited companies, allowing them to access the latest vehicles at set fixed monthly payments over an agreed term. Here are some frequently asked questions we receive about leasing a business car:

What is a business car lease?

Business car leasing is an option for companies who not only want the latest and safest vehicles but also a tax-deductible asset.

Leasing a car allows a business to not only dictate the type of car they want to represent them to clients and customers but also the mileage, deposit, and monthly payments suitable for their budget and cash flow.

Who qualifies for business leasing?

To qualify for a business car lease, the applicant must be either a sole trader, a partnership, VAT registered company, or a Limited company (either PLC OR LLP). This documentation allows a business to be eligible for business car finance.

How much does it cost to lease a business vehicle?

With VAT savings, fleet discounts, and corporation tax benefits on various models, at Hippo Leasing we have a wide range of deals to suit any businesses budget, make or model – from vans and pick-up trucks for tradesmen to saloons and estates for salesmen. With deals starting from under £150, find the right vehicle for you.

What type of contracts are available for businesses?

Hippo Leasing offer a variety of ways for you to personalise a business car lease, so it is suitable to the needs of your business. From the initial payment you wish to make (from zero deposit to 12 months) and contract length (between 12 to 60 months) as well as the yearly mileage (5,000-30,000), it ensures that you can budget specifically for the vehicle at terms suitable for you.

What are the pros and cons of business leasing?

Leasing a business car brings with it a variety of perks, with the two main pros being savings on VAT for your business, with 50-100% reclaimable, and Benefit in Kind savings for your drivers. Furthermore, if the business car you choose to lease has under 130g/km in CO2 emissions the full amount of the lease is reclaimable against taxable profits.

For your drivers, providing them with the latest models ensures they will benefit from the reliability, safety and fuel economy of driving the most current cars while also giving your business an exceptional public image.

One downside to leasing is you’re beholden to the terms of the lease: so, if you have signed a contract for a 36 month lease on an Audi A4 you are required to meet the terms of that contract with no option to swap the car or exit early without paying the terms of the contract.

Should I buy or lease a business vehicle?

On top of the cost savings and efficiencies listed above, leasing a business car provides fixed costs for better cash flow without needing the capital to buy a fleet of cars outright. On top of this, leasing allows you to swap your car and keep your fleet current while avoiding depreciation.

However, only you know whether buying or leasing a business vehicle is right for your business with factors such as mileage, tax arrangements and type of car all informing your decision.

Can I lease more than one business vehicle?

Ford Transit van fleet

Many businesses benefit from fleet discounts, so the more cars you choose to lease the more cost savings can be had. Shop around on Hippo Leasing and find the best deal to suit your needs.

Can I get out of a business car lease?

As stated above, you’re beholden to the terms of your lease contract. This means that if you signed up to lease a Mercedes-Benz Vito for 48 months with a 10k annual mileage for £200 per month then you are required to pay that amount for the duration of the contract with no option to exit early or swap vehicle without paying a hefty fee.

How to qualify for a business car lease

If you want to lease a car through your business, as part of the application process you may need to provide information including company details, details of your directors, and bank details of the business. A company credit check to access your business registration details will also be required.

For businesses that have only been trading a short period of time or have bad credit, they may also be asked to provide a director guarantee along with business bank statements. At Hippo Leasing we believe that bad credit doesn’t mean you should feel limited when trying to lease a car and our team will work with you to find the right deal.

What are the best business cars to lease?

Traditionally, the Ford Mondeo was always the most popular lease vehicle for the businessman going up and down the motorway for meetings.

In recent times more and more businesses were opting to lease a double cab pick-up truck as their company car of choice to take advantage of the HMRC tax rules around its Light Commercial Vehicle classification and qualify for VAT reclaims.

With more choice in the electric vehicle market now, this trend is switching as more business look to take advantage of reclaiming the full amount of the lease against taxable profits due to the electric vehicles emitting no CO2. Furthermore, as of April 2021, there is only a one percent tax on Benefit in Kind for electric company cars bringing additional benefits to your drivers.

How does car leasing work at Hippo?

Leasing a business car with Hippo doesn’t have to be a lengthy drawn-out process, in fact we’ve broken it down into an easy four-step process:

Find your dream car – Get pre-approved – Reserve your car online – Start driving

Apply for a lease car now

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