Guide to Choosing a Company Car

What is a business lease?

Business car leasing lets you 'rent' a single car, van or entire fleet for a fixed period, making set monthly payments until your contract is over. Afterwards, you return the vehicle and take out a new lease, avoiding selling and depreciation issues.

This is an ideal solution for companies who need work-related transport. You also receive tax benefits for business leasing.

Our business car leasing explained guide details everything you need to know about leasing cars for business use, including the benefits of choosing this option.

Who can take out a business lease?

Many organisations qualify for a business lease, no matter how long they've been trading. These include:

• Limited Liability Partnership (LLP)
• Public Limited Companies (PLC)
• Local Authority
• Partnership
• Limited Company (Ltd.)
• Charity
• Embassy
• Self-employed/sole trader

How to get a business lease?

Applying for a business lease is a simple process, and our team is on hand to guide you through the steps or answer any questions.

Here are the six steps to take to get a business car lease:

Step 1: Choose your ideal company car

As with personal car leasing, the first step involves picking out the car or fleet you'd like to use for your business.

Our website enables you to search using a wide range of filters, so you can quickly narrow down from the hundreds that are available. You can choose by:

• Budget
• Model
• Body type
• Detailed search (such as trim level)
• In-stock vehicles

You can also search by engine and emissions, which is ideal for businesses that are able to benefit from VAT breaks if certain levels are achieved.

You may have chosen a few cars you'd like to get a quote for, and the next step requires you to provide more details about the contract. For example, how long do you want to lease the car, and what is the maximum number of miles it will be driven during the contract term?

You can add a maintenance and insurance package for an additional cost. This includes:

• Insurance
• Servicing
• Minor repairs
• Accident management
• Breakdown cover

Step 2: Get a quote

You may have chosen a few cars you'd like to get a quote for, and the next step requires you to provide more details about the contract. For example, how long do you want to lease the car, and what is the maximum number of miles it will be driven during the contract term?

For an additional cost, you can add on a lease with insurance and/or a maintenance package. Options include:

• Insurance
• Servicing
• Minor repairs
• Accident management
• Breakdown cover

You can complete the quote details on our website. Or, if you have more questions you need answering, call our team, who are available to help.

Step 3: Finance application

Business car leasing requires the company to go through a credit check. This involves sending your application details to one of our financial partners, who will check your credit rating. They may also request additional information about the business and the director(s) in order to reach a final decision.

The reason for this is for them to ensure the business will be able to continue making the payments for the full length of the contract. The information they may request can include the following:

• 3-6 month's bank statements
• Names/addresses of director(s)
• Opening balance sheet (if available)

In some cases, you may not be asked to supply any of the above. However, it is better to have the information available, just in case.

If you or your company has bad credit, don't worry – you may still be accepted. You can find out more about business leasing with bad credit; just contact our team for information.

Step 4: Finalise your order

With the credit check completed, you can now finalise the order for your lease car. It is important to read the order form carefully to ensure all your details are correct and you are happy with the deal you are signing up for.

Your dedicated Account Manager will also take the time to verify the contract particulars to ensure we are ordering the vehicle you require. You can then sign the contract, and we will send it off to the supplier for the next stage of the order.

Step 5: Sign off the financial documents

The financial documents are another important part of the process that needs to be completed. These can be sent to you via email for you to review in your own time.

All you have to do is read through them, and if everything is accurate, sign and return them to your Account Manager. Most of our contracts now use e-signature, which speeds up the whole process.

Step 6: Delivery of your car

When assessing which car to order, the Account Manager will be able to provide estimates on how long it will take to be delivered. We will have a clearer idea once the order has been confirmed and the manufacturer informs us of their production schedule.

In some instances, the car is already in stock, which means it can usually be delivered in as little as a couple of weeks. If it is coming from the factory where it is being produced, it will usually take a bit longer for the delivery to take place. We keep our customers up to date as soon as we get clarification from the manufacturer, so you can arrange the start date of your insurance.

If you're looking for more details on business leases, check out our guide how does a company car work.

What should I consider when choosing a car?

There are a variety of makes and models suited to business car use. But what's the best option for your company? Below are a few examples of what to consider when taking out a company car lease to help you get the right vehicle for your travel needs.

The budget

Figure out how much the business can afford to spend upfront and each month on a car. Most often, companies commit to a contract lasting between two and four years, so you need to consider this when working out your budget.

The purpose and passengers

The type of business will determine the kind of car you need.

For example, if you employ salespeople who need to travel to and from client meetings, you can choose between a petrol or diesel-based engine, depending on whether it's local or national travel. If you are making deliveries or providing a service that requires tools to be carried from location to location, then a van may be suitable.

Business, pleasure or both

It's essential to consider the usage of your company car as this can have tax implications depending on the travel. Business leases can be used for both personal and company driving. However, if an employee uses it for personal use, it is subject to Benefit in Kind (BiK) tax.

Fuel type

Another important consideration is running costs, and this incorporates fuel costs. Diesel has long been a favourite for company car drivers as these models typically offer more miles to the gallon. However, as it is also the most polluting type of vehicle, it commands higher BiK rates compared to petrol and electric.

The most economical option for companies could be electric vehicles. They cost less to charge compared to filling up with diesel or petrol, and workplace chargers can be installed with help from a government grant. Employees driving electric company cars also enjoy lower BiK rates.

Insurance

Neither fire, theft and accident, nor third-party insurance policies are accepted for business car leasing. You will have to take out comprehensive insurance coverage for the duration of the contract.

You can arrange insurance externally or opt for an insured business car lease that covers everything you need at one monthly cost. Leasing Options offers insured car leasing. It's popular with many businesses as all factors are covered in one place, and it even covers all staff that meets the criteria on one policy.

Delivery times

If you need a company car within a few weeks, it's essential to check out in-stock lease cars, as these can be ready for you more quickly. Some models may have a wait time. This will be communicated to you when selecting your company car. The Leasing Options team will update you on delivery dates once the order is confirmed.

What's the best company car?

If a company car sounds perfect for your business travel needs, what is the best model to choose?

Considering the above points, such as budget and usage, we look at seven of the best cars that provide a comfortable and practical drive.

1. Tesla Model 3

The Tesla Model 3 is a practical, cost-effective saloon model offering pure electric power. It's an ideal choice if you're travelling into low emission zones and BIK rates are low, currently 2% until 2025. Inside is roomy with minimal styling, and you get up to 374 miles range between charges – which is one of the best EVs on the market.

Monthly costs start from £386.87 + VAT.

2. BMW 3 Series 330e

BMW is often a popular choice for company cars as this brand guarantees luxury, style and excellent fuel economy. The BMW 330e is no exception. Combining petrol and electric, this plug-in hybrid is a well-rounded company car with a spacious interior and impressive driveability.

Monthly costs start from £439.88 + VAT.

3. Kia Niro EV

Another electric vehicle topping the company car list is the Kia Niro EV. Kia is proving a top contender for practical, stylish and cost-effective EVs, and this model demonstrates just that. Again, as it's pure electric, BIK rates are low, and you get around 285 miles per charge which is pretty good even for motorway miles.

Monthly costs start from £283.84 + VAT.

4. Mercedes C-Class C300e

If you're looking for a premium saloon that will make an impression, the Mercedes C-Class provides all the style and luxury you need. As a plug-in hybrid, you enjoy lower BIK rates compared to petrol and diesel versions. Plus, its up to 71-mile range of pure electric power is ideal for client visits and short journeys.

Monthly costs start from £628.83

5. Mercedes Vito

Companies are looking for something more spacious – for example, if you make deliveries – the Mercedes Vito is a top choice. This model comes in three lengths – Crew, Tourer and Taxi version (although the Taxi is only available to private hire licence holders). There's a choice of four diesel engines, which provide great mpg. But you can also get the eVito which offers up to 162 miles range, ideal for city driving.

Monthly costs start from £398.80 + VAT.

6. Toyota Proace

The Toyota Proace is a medium-sized panel van that makes a great company vehicle for various needs. It comes in a 1.5 or 2.0-litre diesel engine plus the choice of an all-electric version, which provides up to 205 miles of battery range. In addition, there's a host of innovative onboard tech, including blind spot detection and lane departure.

Monthly costs from £303.95 + VAT

7. Volkswagen Transporter

For a stylish and practical company van driving experience, the Volkswagen Transporter is a great choice. It's often known for its conversions into campervans, but this model is ideal for businesses looking for comfortable driveability. This van comes with a 2.0-litre TDi diesel engine and is fitted with a DSG auto box for a smooth ride. There's also the option of four-wheel drive.

Monthly costs start from £252.98 + VAT.

Whether you need a director's car or a whole fleet, start looking for your company car lease today. We also have many special offers available to help you save money. Contact us for further details.

*Monthly prices may vary depending on model, mileage, extras and additional packages.