Business car leasing can seem like a viable option if you are self-employed and want a vehicle you can rely on. But does it make sound practical and financial sense? Let’s take a look at the pros and cons of this type of business contract hire.
Data from the British Vehicle Rental and Leasing Association shows that business and van lease markets are both growing, particularly for electric plug-in vehicles, but is it a viable option for you? Here are some factors to consider.
Downsides of business vehicle contract hire
The two main downsides are that you will never own the vehicle that you have been paying for and there is usually a mileage cap with expensive penalties if you exceed it. Having said this, there are business contract purchase agreements that allow you to buy the vehicle in the end.
You will normally also have to commit to monthly payments for 2 or 3 years. Then you will give that car back and have the opportunity to start another lease agreement with a new vehicle.
Benefits of car leasing
Here are some of the benefits of car leasing Bristol and elsewhere:
Tax reduction
Hiring a car for business can help you to reduce what you pay in tax. You can claim all of the VAT back on your monthly payments if you only use it for work purposes. If you are a Self-Assessment taxpayer, you can remove allowable expenses from your turnover and reduce your tax bill accordingly.
No major initial outlay
Yes, you will have to pay a deposit when car leasing Bristol and other areas of the UK, but this is nothing like the major expense of buying a new car. Commit to the monthly payments and away you go.
Avoid maintenance costs
Maintenance and service costs can be covered by your car lease company, meaning you won’t have to face unexpected bills. Road tax is also normally included in your lease and you can even choose to include insurance and breakdown cover.
