Is my business financially eligible for car leasing?
In order to lease a vehicle, your business will need to undergo a credit check as part of the finance application process. Finance providers use this credit check information and details on your application to make a final decision. A good credit report is not the sole factor to being eligible for business leasing but can play a part in your chances of getting accepted for a business lease contract.
If your business is less than two years old you might be asked to produce additional paperwork such as three months’ business bank statements, a director's guarantee (ltd companies only) and management accounts (if available). Occasionally, a larger initial rental may also be required. This is because it is difficult for the finance provider to gain insight into the business and the potential lending risks involved.
What financial information do I need to supply about the business?
When applying for a business lease contract, you will have to fill out a business finance application form. You will be asked to provide the following information:
- Company details such as registered name, registered address, company registration number, VAT number (if applicable) and annual turnover
- Director details including their name, address, marital status and date of birth
- Company bank details including bank name, sort code and account number
If you have previously been denied vehicle finance or if the business being less than two years old, you may be asked to provide some additional information such as:
- Three months' business bank statements
- Management account
- A director's guarantee
Take our brief interactive Is Your Business Eligible for Finance questionnaire below to determine if your business is likely to be accepted for finance.
What are the tax advantages of business car leasing?
One of the biggest advantages of business car leasing is the positive tax implications. Monthly instalments' cost can be claimed back as a business expense, along with car road tax and fuel, but the total amount you claim will depend on the vehicle's emissions.
If you intend to use your leased vehicle solely for business, you can claim back up to 100% of the VAT. However, If you want to use the vehicle for personal use, you can only claim back up to 50% of the VAT. It's essential to keep in mind that you can also claim up to 100% of the VAT if you choose to take out a maintenance package with your lease agreement.
Who pays for car insurance - the company or the employee?
With a business lease, the company covers all insurance costs and, in some cases fuel costs. The insurance certificate needs to be in a director's name or the company name. If an employee is expected to drive the vehicle, a letter on company headed paper may be needed. This confirms that the employee is authorised to drive the vehicle and to verify his/her position in the company.
Your new vehicle lease hire needs to be insured from the day of the delivery and must remain insured until the finance provider collects your vehicle. Proof of insurance is required before delivery can take place. This must be a fully comprehensive insurance policy, and the certificate must show your name, registration number, and date on or before your delivery date.
If your business owns multiple vehicles, you may want to look at fleet insurance as it can also be tailored to your business demands and save you money in the long run.
Can I buy the vehicle at the end of the contract?
With a Business Contract Hire and Finance Lease, you don't have the option to buy the vehicle at the end of the lease contract. However, with a Business Contract Purchase and Business Lease Purchase, you can take ownership of the vehicle at the end of its contract.
How do I apply for business car leasing?
If you think business car leasing is right for you, browse our range of business lease deals to choose from a wide range of vehicles. You'll need to tell us your estimated annual mileage, preferred initial rental and contract length. Road tax is included in the cost, so you don't need to worry about paying for that separately.
You can also choose to add maintenance to your monthly payments. This will cover any mechanical or electrical repairs, servicing and more, potentially saving you money in the long term. You can also claim up to 100% of the VAT if you choose to take out a maintenance package with a business lease deal.
Once you've agreed to your contract, we'll deliver your car to your front door for free (exclusions apply). Your monthly payments will then start, allowing you to drive and enjoy a brand new car for the length of your agreement.
For more information on the different types of business leasing offers, check out our comprehensive guides on Business Vehicle Leasing or call Nationwide Vehicle Contracts on 0345 811 9595 for expert advice.