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What is a Business Contract Lease?

  • What is a Business Contract Lease?
  • What is Business Contract Hire?
  • How is the cost of a Business Contract Lease calculated?
  • What are the pros and cons of a vehicle broker?
  • What is excess mileage?

When you start to look at leasing for your business, you’ll likely come across the term Business Contract Leasing, one of a few business leasing options that are available.

Business Contract Leasing is one of the most popular and fast-growing lease schemes in the UK and it doesn’t look like it’s going to lose traction at any point in the near future.

But, what is it?

In this article, we look at Business Contract Leasing, which you will often see referred to as Business Contract Hire, including what it is and the pros and cons you should be aware of.

What is a Business Contract Lease?

The official definition of Contract Hire is “an asset leased to someone for a set period of time”. In this case, the “asset” we’re referring to is a vehicle and the “someone” is a business. The Lessor is the person who leases the asset out (in this case the Leasing Company) and the Lessee is the person who upholds specific obligations as defined in the lease agreement.

Business contract lease

What is Business Contract Hire?

Most often, when we talk about Business Contract Leasing we are talking about Business Contract Hire, also often referred to as BCH. It’s one of the most popular forms of leasing and is the one that many are talking about when the subject of car leasing is brought up.

Business Contract Hire is an agreement where a business has a vehicle, or a fleet of vehicles, for a set period of time (usually between 2 and 5 years), paying a monthly fee and sticking to a pre-agreed mileage. 

Once this agreement is over, the business returns the vehicle(s) with nothing further to pay (subject to mileage and condition restrictions, which we will be discussing in this article).

If you’re interested in finding out more about other leasing options available, download our FREE guide.

What are the advantages of Business Contract Leasing?

There are a lot of advantages to Business Contract Leasing, which is a large part of why it is so popular. Some of the advantages include:

What are the disadvantages to Business Contract Leasing?

Where there are advantages there are also disadvantages, and we want to ensure that you are fully aware of both pros and cons of Business Contract Leasing. The disadvantages include:

How is the cost of a Business Contract Lease calculated?

When you’re looking for your next business vehicle you need to be aware that there are several things that will affect the cost of your Business Contract Lease, including:

When it comes to a Business Contract Lease the cost of your monthly payments are specifically determined by the following:

The general calculation is as follows:

Purchase price – deposit [or first rental] + interest

– estimated residual value

/number of monthly payments

Due to the amount of information that is required to get the final cost of your lease, you will need more than a calculator, so we recommend you contact OSV and we can talk to you about the leases we have available and how it’s all broken down.

Want to go over your vehicle requirements with a team of experts? Get in touch with the vehicle specialists at OSV. Call us on 01903 538835 or request a call back.

How can I get a Business Contract Lease?

There are a few different ways to get a Contract Lease, with two of the most common being working with a vehicle broker, like OSV, or a dealership.

Essentially, a vehicle broker is the middle-man, working with you, a dealership and the Finance House. As a vehicle broker, we can make the journey to finding your new car much less stressful and far easier as you come to us with your requirements and then we go off to find the best deal for you. You then select the one that is best for you and we can start the paperwork.

Business Contract Lease

If you’re looking to go the more traditional route then a dealership is the way to go. You go into a dealership that sells the brand of your choice, be that Kia or Volkswagen, choose a car and then the buying or leasing process is started.

What are the pros and cons of going through a vehicle broker?

There are quite a few advantages to getting a new vehicle, whether leasing or buying, through a vehicle broker. These include:

The biggest concern many people have before they go through a broker is unfamiliarity, however, if you go through a reputable broker, that has accreditations and is transparent when it comes to how they work, these fears will be easily eliminated. Key is ensuring that the broker you are working with has experience and is reputable.

If you are in doubt, we have put together an article to help you ask the right questions.

What are the pros and cons of going through a dealership?

As with a vehicle broker, there are some advantages to getting a new vehicle through a dealership. These include:

However, there are also some disadvantages to getting a new car through a dealership, which include:

If you have questions about which option is better for you, we’ve put together an article that looks at both dealerships and brokers in more detail.

Want help with getting a new vehicle? Get in touch with our experienced team by requesting a callback, or call us now on 01903 538835.

What is excess mileage?

As we have already mentioned, if you go over the mileage you agreed at the start of your lease, then you will be subject to something called an Excess Mileage Fee.

The amount you will have to pay for your excess mileage will depend on the lease company and sometimes the vehicle model, it can range anywhere from 5p to £1 per mile (all these costs will have VAT added).

If you have any further questions about Excess Mileage, we have put together an article that will answer them all.

In conclusion, Business Contract Leasing or Business Contract Hire is the most popular form of leasing and a hugely popular way of financing a car for your business. As you can see from this article, there are a number of advantages to Contract Leasing, including some great tax benefits for your business and the fact that you don’t need to think about depreciation.

You have the option of getting a Business Contract Lease from either a vehicle broker or a dealership, both are viable choices for you to choose from.

Hopefully, we have been able to clear up a few things for you when it comes to Business Contract Leasing and how it works.

NEED A NEW BUSINESS VEHICLE?

Do you have questions about your options? Get in touch with our team of vehicle specialists and we can help. Request a FREE consultation or call us now on 01903 538835

Vehicle leasing for businesses

  • What vehicle leasing options are there for businesses?
  • What are the business benefits of vehicle leasing?
  • Vehicle leasing and Company Car Tax

Before we start talking about how to lease a car through your business, we should take a look at what business leasing actually is.

Vehicle leasing for businesses

Leasing is where you have a car for a period of time, most often between two and five years. During this time, you pay a pre-agreed monthly fee. After that time is up, you hand the car back and get a new vehicle. It is essentially renting a car for a period of time.

If you’re a business there are a few leasing options for you to choose from when getting a new vehicle, and that’s what we’re here to talk about.

Want help finding that perfect business vehicle? Call our team of vehicle specialists today on 01903 538835, or request a callback.

What vehicle leasing options are there for businesses?

There are three options are available to you if you’re considering business vehicle leasing:

What is Business Contract Hire?

Business Contract Hire, which you will often see or hear referred to as BCH or sometimes Contract Hire, is the most common form of leasing, and the one that people are referring to when they talk about leasing.

When you or your business get a vehicle with a Business Contract Hire agreement, you agree to the following:

If you go over your agreed mileage or the car is judged to be in a condition that exceeds Fair Wear and Tear, then you could be subject to charges. Have questions about excess mileage fees? We’ve put together an article that should answer them all.

Vehicle leasing for businesses

What are the pros and cons of Business Contract Hire?

There are several advantages to Business Contract Hire, including:

Where there are advantages, disadvantages follow and there are a few when it comes to BCH, these include:

What is Business Contract Purchase?

Business Contract Purchase works in the same way as Business Contract Hire for the duration of the contract. You pay a monthly fee for a vehicle for a set period of time. Where Contract Purchase differs from Contract Hire is that at the end of the contract, instead of returning it you have three options:

How is the Guaranteed Minimum Future Value calculated?

The GMFV is calculated by working out how much your car will be worth at the end of the contract.

This amount takes into account the mileage you’ve agreed, the length of the contract, the make and model of the car and the expected depreciation. The GMFV will not change for the duration of the contract, so you’ll know how much you will owe at the end of the contract from the very start.

What are the pros and cons of Business Contract Purchase?

Some of the advantages of Business Contract Purchase include:

However, there are some disadvantages, such as:

What is Finance Lease?

A Finance Lease is one of the traditional ways to get a vehicle for a business and is more suited to vans or vehicles that are going to be doing excessive mileage or suffer damage that falls outside of Fair Wear and Tear.

Over an agreed period of time you make monthly payments for the vehicle, as you would for a normal lease contract, however, once the contract ends you have two options:

What are the pros and cons of a Finance Lease?

Some of the advantages of a Finance Lease include:

However, where there are positives there are some negatives you should be aware of:

Have questions about the finance options available? Download our FREE guide to leasing.

What are the business benefits of vehicle leasing?

We’ve already gone through the individual benefits of each lease option, but there are general benefits to vehicle leasing for businesses, including tax benefits.

Tax Benefits

If your business is VAT registered and you have decided to lease through it, then you can claim up to 50% of the VAT back on the monthly payments. If you get a van then you are able to claim 100% of the VAT back.

There is an exception to this rule. If you make personal journeys in your vehicle, using it for personal errands outside of work hours, then you cannot claim the VAT back.

You can, however, claim the monthly cost of the lease against profits.

If your car emits less than 110g/km of CO2 then you can claim 100% of the monthly cost back, but if it emits more than 110g/km of CO2 then you can claim 85% back.

Off and On Balance Sheet

If you have a vehicle on a Business Contract Hire agreement, the liability of the finance can be “off balance sheet”.

If you have a Finance Lease agreement, then it can be “on balance sheet”.

Both of these options are beneficial to a business.

Vehicle leasing and Company Car Tax

If you have a company car then it’s possible you’ll also have to pay Company Car Tax.

If you use your vehicle for personal errands, including the daily commute to and from the office, then you will be required to pay Company Car Tax.

Unless you have a van, the amount you pay will depend upon several things:

The general rule to go by when looking for a company vehicle (if you are looking to pay less Company Car Tax) is, the more CO2 the car emits, the higher the Company Car Tax you’ll have to pay.

We hope that this article has provided you with the information you need when it comes to vehicle leasing for your business, including the options available and their pros and cons. 

We believe it’s important to be informed when making a decision about your vehicles and the options that you can choose from whether leasing or buying.

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Business Leasing for the self-employed

  • How does van leasing work?
  • How does van leasing for the self-employed work?
  • Can I lease a van if I have bad credit?
  • Will I have to pay Company Van Tax?

If you’re self-employed, then chances are at some point you’ll realise you need a vehicle. It’s also likely you’ll need a van.

When looking for a van there are a few questions you will need to answer. For example; do you want a brand new van, a nearly-new van, or perhaps an older used van? 

Van leasing for the self employed

If you’re looking for something more economical and reliable then we’d recommend you look at nearly-new vans as they will also present a good image for your company. Another benefit is that as they haven’t been on the road as long as an older used van they are much less likely to be in and out of the garage costing you time and money.

Another advantage to choosing a new or nearly-new van is that you can get one on a lease. Van leasing for the self-employed sounds daunting, but it really is quite simple.

In this article, we’re going to look at van leasing for the self-employed, this includes going into how van leasing works and everything that goes into getting approved for finance.

How does van leasing work?

Van leasing is not all that dissimilar to business car leasing in the way it works. There are two options available to you, Contract Hire (also referred to as Business Contract Hire, or BCH) and Finance Lease.

Contract Hire

Contract Hire is the most common form of leasing. When the agreement is put together you agree to have the van for a set period of time, usually between 2 and 4 years. During this time you’ll pay a fixed monthly fee for the vehicle.

Once the agreement comes to an end, you had the van back with nothing further to pay*.

*Any vehicle on a Contract Hire Agreement is subject to mileage and condition restrictions. You agree to a set mileage per year and if you go over this mileage then you will be required to pay an excess mileage fee. You are also obliged to keep the vehicle in a condition in line with the BVRLA Fair Wear and Tear Guide. If, when the time comes to return your van, the damage is not in line with the standards that they have set then you will be subject to damage charges.

Finance Lease

If you’ve been looking for a van and your trade requires that you travel considerable distances on a daily/weekly/annual basis then Finance Lease is an option you should consider.

While Finance Lease works in a similar way to Contract Hire in that you have a vehicle for a specific set period of time and during that period make pre-agreed monthly payments, there are no conditional or mileage restrictions.

When the time comes for you to return your van you will have a final, slightly larger payment, often referred to as a balloon payment, to make. 

At this point, you will have to find someone to buy the van from the Finance House in order to cover the final rental payment. If you find someone to purchase the van for more than the value of the final payment then you keep the equity. However, if you sell the van for less than you owe then you will need to pay the remaining amount yourself.

If you would prefer to keep the vehicle for another year then you can pay a small fee, otherwise known as the Peppercorn Rental (which is usually equivalent to a single month’s payment) and keep the van for another year. You can continue to do this for as long as the Finance House will allow you to, however, you need to be aware that you will still have to pay the total balloon payment when you do finally end the agreement.

Interested in finding out more about your finance options? Download our FREE comprehensive guide to Leasing.

How does van leasing for the self-employed work?

If you’re self-employed then there is no reason why you should not qualify for van leasing (though we will talk about that a little later).

So, how exactly does it work?

You find a vehicle broker that is trustworthy and has experience in business leasing. 

OSV was set up in 1997 and we have worked with 1,000s of individuals and businesses, helping them to get behind the wheel of a new vehicle. We also BVRLA and FCA approved and our team are all qualified in SAF (Specialist Automotive Finance).

Once you have found your reputable vehicle broker you discuss your requirements and your budget with them and they will go out and do all the searching for you to find the best offers available.

The vehicle broker will come back to you with the various deals they have found and then you select the one that fits your needs and you prefer.

At this point, the Finance House will carry out a credit check to see if you qualify for finance.

A credit check is carried out so that the Finance House is sure that you are able to make the monthly payments for the vehicle. It’s possible that, at this stage, they will also ask to see other documents. These documents include:

It’s also possible that you will be asked to provide a copy of your most recent bank statements.

As long as your credit score is good and the Finance House is confident that you will be able to meet the monthly payments for your lease, then there is no reason why you shouldn’t qualify for van finance.

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Can I lease a van if I have bad credit?

Having bad credit can make applying for finance for a vehicle slightly more difficult. This is due to the fact that the Finance House will carry out a credit check and your credit score as a guide when it comes to confirming if you can meet your monthly lease payments.

If your credit score is bad, this doesn’t offer the Finance House any reassurance that you will be able to make these monthly payments.

It’s always worth checking to see what your credit score is before you apply, especially if you’re unsure.

Van leasing for the self-employed

It’s not the end of the world if you do have a poor credit score. However, there is no denying that it will make things more difficult when you apply for finance. 

We would recommend that you contact a broker that has experience working with individuals and businesses with a poor credit score. These brokers tend to have a strong working relationship with Finance Houses that will be able to offer the best solutions to individuals and businesses with bad credit.

If you have bad credit, but you have evidence that you will be able to make the payments (whether that is your company accounts or bank statements) then there is still a chance that you will be able to lease a van.

It’s worth knowing that if you do have poor credit and are able to get a vehicle lease then it may cost you a little more as you are a greater risk.

If you are unable to get finance for a van then your alternative is looking at buying a used van outright.

Will I have to pay Company Van Tax?

If you have a van that is used for both personal and business journeys (e.g. using it on the weekends when you’re not working and for personal trips), then you will have to pay Company Van Tax.

When it comes to vans, the tax works differently, which is massively beneficial for you as it works on a fixed Benefit-in-Kind (BiK) rate. Cars work on a sliding rate that depends on the amount of CO2 that the car emits.

If you are driving a petrol or diesel van your Company Van Tax works on a fixed rate of £3,500. Your annual payments will depend on the personal tax bracket you are in, so if you’re in the 20% bracket you’ll pay 20% of £3,500, which is £700 per year, or £58.34 per month. Of course, if you’re in the 40% tax bracket then you will be paying 40% of £3,500.

If you’ve decided to drive an electric van then, as of April 2021, the Company Van tax has been reduced to £0 in an effort to encourage more businesses to drive electric. We have put together an entire section on the benefits of electric vehicles

We have written a comprehensive article that covers everything you need to know about Company Van Tax if you would like to learn more about it.

In summary, if you’re self-employed then you can get a van lease. As long as you are able to reassure the Finance House that you are able to make the monthly payments then there should be no issue. It’s possible that you will have to provide them with more documentation than if you were leasing as a private individual, however, this is standard when it comes to a business lease.If you have any questions about business leasing, we have a lot of experience answering them.

Are you a sole trader looking for a new van?

Contact us now by requesting a callback or calling us on 01903 538835. We can help.

Benefits of business car leasing

  • What is business car leasing?
  • What are the benefits of business car leasing?
  • Which is cheaper – personal or business leasing?

Leasing is actually one of the most popular ways to get a new car. It’s particularly popular with businesses as it’s a way to get a new vehicle, or a fleet of vehicles, without spending a lot of money or having it tied up in depreciating assets.

There are also some very good benefits to business car leasing, which include tax benefits that make it an attractive option for businesses.

So what are the benefits of business car leasing?

In this article, we look at the benefits of business car leasing and how they can be a benefit to you and your company.

What is business car leasing?

Before we go any further, let’s take a quick look at what a business car lease actually is. We will primarily be talking about Business Contract Hire, which happens to be the most popular form of business leasing and the one that has the most business benefits.

The key points of a business car lease are the following:

So those are the basics when it comes to business car leasing.

As we have previously mentioned, we will be focusing mainly on Business Contract Hire.

Have questions about the various leasing options available? Download our FREE comprehensive guide for more information.

What are the benefits of business car leasing?

Okay, so what are the benefits of business car leasing?

Vehicle leasing is extremely popular with businesses, and that’s due to the fact that there are so many benefits to business car leasing. We’re going to talk about the benefits and how business leasing can be great for you and for your business.

What are the tax benefits of business car leasing?

One of the biggest bonuses of business car leasing is the tax benefits. This is one of the main reasons why businesses often opt for Business Contract Hire.

According to HMRC, if you have a vehicle on a Business Contract Hire agreement, then technically you are renting it. Therefore, if your business is VAT registered you can claim 50% of the VAT back on the monthly and initial rental payments in your quarterly VAT return. You can only claim 50% back as HMRC assume that you will be driving on company business half the time and for personal errands the other half.

If you have no intention of the vehicle being used for personal journeys (including the commute to and from work) then it is possible for you to claim 100% of the VAT back on monthly and initial payments.

If the vehicle is kept securely in your place of work when not in use, and other employees of the company are allowed to use it, then the car will qualify as a ‘pool car’. It will be necessary to notify HMRC that the vehicle is a ‘pool car’ and they will then allow you to claim 100% of the VAT back.

However, it’s worth being aware that normally, you will only be able to claim back 50% of the VAT as most companies like to use their company vehicles for the daily commute, business travel and personal journeys on the weekends and outside of working hours.

Another benefit of business car leasing is that the liability of the vehicle does not show on the company accounts. It can be “off balance sheet”. All Limited company accounts have a balance sheet containing all the business assets and how much is owed. However, a Business Contract hire agreement doesn’t show up as a liability. Considering a new vehicle can often cost upwards of £30,000, this is a huge benefit to the business. If the business has strong accounts then it’s possible to set up credit facilities for it, as well as borrow money.

You can also offset the monthly rental payments against your monthly tax bill. How much you can offset depends on how much CO2 your vehicle emits. If the vehicle (or vehicles if you have a fleet) emits more than 110g/km of CO2 then you can only claim 85% of the monthly rental against profits. However, if the car emits less, then it’s possible to claim 100% back.

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What are the cash flow benefits of business car leasing?

Another huge business advantage is the positive effect on cash flow. Everyone knows that in business, cash is king. And it’s an unavoidable fact that cars are expensive.

However, if you lease a vehicle, then your cash isn’t all tied up in an asset that is constantly depreciating. Also, if you’re not spending the money to buy a car outright then you’re not tying up a huge amount of money that could be used in the daily running of your business.

Whether you choose to put more down initially and have smaller monthly payments or pay more monthly in order to put down a small initial payment is up to you. Regardless, you have more money in the bank that will enable you to do your daily business.

Also, when you lease a car, you’re not actually paying for the whole car, you’re really only paying for the depreciation, in comparison with when you use a purchase scheme such as Hire Purchase where you pay for the whole vehicle over a period of time.

Business leasing is a great way to free up funds for your company.

What are the time-saving benefits of business car leasing?

Another benefit of leasing is simply the fact that it can save you time. Leasing is a very convenient way of getting a single new company car or a whole fleet.

If you decide to go through a vehicle broker, like OSV, then we can make it even simpler. All you need to do is get in touch with us, let us know what your budget is, the sort of vehicle that you’re interested in, the mileage you need and we will do the rest.

We can search for the perfect vehicle to fit your needs and then present you with the options we discover so you can choose which is the best for you. It’s that straight forward.

Another important factor is that the monthly payments are fixed, and Vehicle Excise Duty, often referred to as Road Tax, is often included. It’s also possible to get a maintenance agreement that will cover all the servicing costs for the duration of your contract. A maintenance agreement is a small additional fee and essentially staggers the cost of the servicing across the duration of the contract, instead of having to fork out the full amount when the time comes.

Which is cheaper – personal or business leasing?

If you have a business, it’s possible you’re wondering whether you should go for a personal lease or a business one. You may have also noticed that business leases often have lower monthly payments than the same vehicle on a personal lease.

Due to strict financial regulations, the full purchase price of a vehicle has to appear on all documents with a personal lease. However, if you get the same vehicle on a business lease the price doesn’t have to appear. This means that manufacturers are more inclined to put a bigger discount on a business lease.

We briefly touched on how the cost of a lease is determined earlier. Essentially the cost of a lease is worked out by looking at the difference between the purchase price and the residual value of the vehicle. This difference is then divided into monthly payments. Therefore, the smaller that difference is, the lower the monthly payments you have to make. As the purchase price is often lower for a business lease, the cost of a business lease is cheaper.

Business leasing is very appealing to many, and it’s easy to see why. There are huge benefits to business leasing, including the positive effect it has on company cash flow and the tax benefits.

It’s also incredibly convenient, time-saving and a very good way to attract the best employees when a company vehicle is offered as part of the job package.

We talk to businesses every day and are often asked to explain the many business benefits of leasing a vehicle. So if you have any questions, then get in touch and let us help you.

LOOKING TO LEASE A NEW VEHICLE?

Request a callback from one of our experienced vehicle specialists or call us now on
01903 538835.

Things businesses should consider before hiring a Fleet Manager

  • What does a Fleet Manager do?
  • What should you look for in a Fleet Manager?
  • Do I need a Fleet Manager?

If you have a business and are thinking of getting a fleet of cars, then it’s possible you will also be considering hiring someone to manage that fleet.

A Fleet Manager is exactly what it sounds like, it’s someone who manages your company fleet for you as an employee of your business.

So, what’s their role as Fleet Manager? Do you really need to hire someone to carry out the job and if so, what sort of person should you be looking for?

What does a Fleet Manager do?

So, what exactly does the role of Fleet Manager entail?

Quite often you will see them referred to as Fleet Supervisors, Fleet Maintenance Managers or Fleet Maintenance Supervisors. Throughout this article, you will see us refer to them using all four of these terms.

What are the specific responsibilities of a Fleet Supervisor?

Compliance

The most important responsibility that a Fleet Manager has is to ensure that the company is compliant. This includes making sure that the employment contracts for those driving company vehicles are appropriate and that the employees have a valid UK driving licence.

They will also have to organise insurance and make sure that the policy has enough cover, in case there is an accident. It’s also necessary to ensure that all company employees are abiding by UK driving laws and the Highway Code.

Arranging the fleet

Without a fleet, there is no need for a Fleet Manager. One of their responsibilities is to organise the fleet. This organisation includes advising the company Directors on the best way to get the fleet. There are several ways to do this, but it will either be through a vehicle broker, a dealership, or a used car dealership.

They will also need to advise the directors on the best, most cost-effective way to fund the fleet. There are several options for funding, including business leasing, with something like Contract Hire or a Finance Lease, or a purchase scheme such as Hire Purchase. Alternatively, if you’re considering buying your vehicles outright, you may want to buy using cash or look at getting a fleet that’s second-hand.

Another thing that a Fleet Supervisor will have to determine having looked at business requirements, is what sort of vehicles you are going to get. Some companies decide that they want all their vehicles to be the same, otherwise known as a uniform fleet. Other companies have a system where they provide different vehicles for different levels of employees.

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Ensuring the vehicle is road legal

The Fleet Supervisor is also responsible for making sure the fleet is road legal. This responsibility includes ensuring that all the vehicles are serviced regularly and are always road legal. It is also the responsibility to ensure that all drivers have the legal documentation required to drive.

All of these requirements are your responsibility as an employer, part of the duty of care you have for your employees.

Another important role that the Fleet Supervisor has is ensuring that the drivers are staying within the pre-agreed mileage allowance. When you lease a vehicle or a fleet of vehicles, you will have agreed to a set mileage that you have to stick to. If any of the vehicles go over the contracted mileage then you will be subject to additional fees. The Fleet Supervisor will also be responsible for ensuring that the mileage is logged on a regular basis.

Maintenance

A Fleet Maintenance Supervisor is not only responsible for ensuring that company employees are keeping below the pre-agreed mileage for the vehicles, they are also responsible for ensuring your company fleet is well-maintained.

How the fleet is maintained is up to you. You can either negotiate an hourly rate with a local dealership or add a maintenance package to your finance agreement.

If you have a large fleet then it can be incredibly time-consuming to organise an hourly rate with local dealerships, especially if you know that they will need to be maintained at multiple locations across the country. However, it can be hugely beneficial if your fleet is going to be looked after at the same location.

If the fleet is going to be based at multiple locations across the country then it’s worth considering organising maintenance agreements as there will be dealerships nationwide that are approved for getting your vehicles serviced.

The Fleet Manager is responsible for ensuring that all the vehicles in the fleet are well-maintained and get services regularly.

What should you look for in a Fleet Manager?

Now you’re aware of all the things that a Fleet Manager is responsible for, let’s look at the things you need to consider before you hire someone to fill the role.

Finding the right Fleet Manager

Supervising a fleet is a huge responsibility and you want to ensure that you’re hiring the right person for the job. One who is qualified and has the right experience that means they’re up to the job and the responsibility that comes with it.

When looking for a Fleet Maintenance Manager, you should ensure that the right candidate has the following:

It’s vital that you find a candidate who has experience as the role is one with an incredible amount of responsibility.

Cost

A key thing that you need to consider when looking to hire someone who will look after your fleet is the cost. The employee will be hired by you and therefore on your payroll. The typical salary for someone in this role is around £40,000 per annum. Of course, there are the other costs associated with any role, including National Insurance and a company car plus office space and any other benefits offered to your other employees. As an estimate, we’re looking at approximately £50,000 to hire someone within your business to maintain and manage your vehicle fleet.

It’s important to take this into consideration when you’re thinking about hiring a new employee as a Fleet Manager. Is it a necessary role that you want to spend money on? Can your business afford it?

Need help with managing your fleet? Request a callback or call us now on 01903 538835.

Do I need a Fleet Manager?

You may have read this article because you’re thinking about a fleet for your business and you need to know what goes into ensuring things are managed correctly. Ultimately, though, your question will probably have been ‘do I need a Fleet Manager for my business?’

In-house Fleet Manager

If your business has a fleet of over 80 vehicles then hiring someone to manage it internally is the best solution. Your Fleet Manager will be able to manage the whole fleet in-house, doing all of the tasks that we have mentioned in this article and ultimately you will save money by hiring someone to specifically carry out this role.

Installing trackers on the vehicle?

If you have a smaller fleet of vehicles then it’s worth considering installing trackers in your vehicles instead of hiring someone to manage your fleet in-house.

A vehicle tracker will not only tell you where the vehicles are during work hours, but it will also provide you with a mountain of data about your fleet. This includes things such as the mileage, the efficiency of the vehicle and the efficiency of the driver. It also gives you data on how well your employees are driving and whether they’re sticking to the speed limits and the Highway Code. A tracker allows you to measure the fleet’s efficiency and helps to lower insurance costs.

Combining trackers in your fleet vehicles and an external fleet management company means that you won’t need someone in your office full-time.

External fleet management companies

If you have a smaller fleet and you’re not looking to hire an in-house Fleet Manager then another option is to find an external Fleet Management company to manage it for you.

They are independent companies who can take responsibility for managing the day to day of having a fleet of not more than 70 vehicles.

We would recommend combining vehicle trackers with an external company, which ensures your business has a cost-effective management system in place to look after your fleet.

Ultimately, it’s down to what you think is best for your business and your fleet situation. If you are unsure, then we recommend contacting a vehicle broker, such as OSV, who will be able to talk you through your options in regards to Fleet Maintenance.

Hopefully, this has cleared a few things up in regards to what to consider before hiring a Fleet Manager. There are many things to consider including the cost of hiring a Manager, how much responsibility they have and what to look for when hiring for this role. It is also worth considering whether you need one in the first place.

WANT TO TALK ABOUT FLEET MANAGEMENT?

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The ultimate guide to Company Car Tax

  • What is Company Car Tax?
  • When do I have to pay Company Car Tax?
  • How is Company Car Tax calculated?
  • Which cars are best for lower Company Car Tax?
  • Who pays Company Car Tax?

If you’re thinking about getting a company car then it’s more than likely you’ve come across the term Company Car Tax several times in your research.

Chances are, if you’re going to get a company car or van that you drive to and from your workplace, you’ll have to pay Company Car Tax

There’s actually quite a lot to Company Car Tax and if you’re new to the idea of it then it can be quite confusing. Being honest, even if it’s something you have some familiarity with it can seem complicated.

In April 2017, some new rules and regulations were introduced that are important to understand and it’s vital that you know how they will have an impact on you if you have a company car. In 2019 new rules were announced that become active from April 2020. These new regulations will benefit those who decide that they are going to get a company car that is either electric or a low-emission vehicle and we will be going into these in a little more detail later on.

What is Company Car Tax?

We are sure that now you’re here you have quite a few questions about Company Car Tax and what it entails, and that’s one of the questions we’re here to answer.

So, what exactly is Company Car Tax?

It’s pretty self-explanatory really, you get a Benefit-in-Kind, which you will often hear referred to as BiK, from your company (in this case your car) and you have to pay a tax on it. How much you need to pay will depend on three things:

Tax bill through magnifying glass

If you’re in the higher tax bracket, then you’ll have to pay more in Company Car Tax. We’ll go into that in more detail later.

Company Car Tax is essentially a form of income tax that, once upon a time, was based on the price of the car and the mileage. However, in 2002, the way that we measure Company Car Tax changed to include how much CO2 a car emits. The inclusion of CO2 emissions was part of an attempt to encourage companies and drivers to use more environmentally-friendly vehicles.

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When do I have to pay Company Car Tax?

If you have a company car or van that you also use for personal journeys which include travelling to and from work, then you will have to pay Company Car Tax.

There are a few exceptions, and these are:

If you’re not doing personal mileage (including your daily commute) or the company vehicle is left on business premises overnight and is being used solely for business purposes – your vehicle could be considered a pool car – then you don’t have to pay Company Car Tax.

The government has announced that in April 2020 there will be changes to Company Car Tax, we will outline these pages below.

How is Company Car Tax calculated?

If you’ve established that you do in fact have to pay company car tax then you’ll need to know how it’s calculated.

Essentially, the amount you will pay will depend on the P11d value of the car, the CO2 emissions and your personal tax bracket. The lower the P11d value and the emissions = the lower your company car tax will be. You can find out exactly how much you will pay on websites such as ComCar.

guide to company car tax - Man working out his tax bill

If you would like to work it out yourself, you can use the formula below:

In 2016, the government announced some major changes to the BiK rates on cars to be introduced in April 2017. These changes included the introduction of more bandings for lower emission cars (such as hybrid and electric vehicles). The introduction of these newer bandings showed that vehicles with higher CO2 emissions could end up costing more than they would prior to April 2017.

Changes to BiK Company Car Tax 2020

In mid-2019, HMRC announced that it would be making changes to the bandings for Company Car Tax for 2020/2021. The most notable change was the introduction of a 0% rate for zero-emission electric vehicles (such as the ever-popular Nissan Leaf and the new Kia e-Niro).

In 2002, when the new bandings were first introduced for lower-emission and zero-emission vehicles, they were much rarer on the roads, so the rate wasn’t quite so generous as it will be from April 2020, and fewer bandings existed, this improved in 2017 and has improved again in 2020.

Guide to company car tax - costs for cars registered before 6 April 2020 (updated to reflect 2021 changes)
Guide to company car tax - costs for cars registered after 6 April 2020 (updated to reflect 2021 changes)

Which cars are the best for low Company Car Tax?

Looking at the tables above, it’s quite clear that when it comes to BiK are fully electric, or ultra-low emission vehicles are the best choice.

However, we acknowledge that electric vehicles aren’t for everyone. There are many reasons why you might prefer petrol or diesel with one of the biggest concerns being range anxiety. Electric vehicle ranges are improving and newer vehicles (such as the Tesla Model 3, Jaguar I-Pace and Audi e-Tron) can travel further on a single charge.

When you’re thinking about getting your new company car it’s also worth considering whether getting a van would be more tax-efficient for you and your business.

When it comes to Company Car Tax there are cars that will cost you less than others, these include (but are certainly not limited to):

BMW i3

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What are the worst cars for Company Car Tax?

If you’re concerned about how much Company Car Tax you’re going to pay then the vehicles which emit the least CO2 are the best, so it makes sense that the models that emit the most CO2 will be the ones which incur the higher costs when it comes to BiK. There are a considerable number on this list, which include:

Logically, the cars that will cost you the most in Company Car Tax are those that have a combination of high P11d value and high CO2 emissions.

Who pays for Company Car Tax?

Both you and your employer pay for Company Car Tax. As we mentioned earlier, it will come out of your salary the same as ordinary tax so you won’t have to worry about paying for it. However, we recommend you talking to your HR if you have any other queries.

So, that’s Company Car Tax. You pay for it like normal tax, and it’s based on your personal tax banding, how much CO2 your car emits and the P11d value of your chosen company car. It is changing, however, and you could end up paying significantly more for your company car if your BiK rate is lower than your income tax and national insurance contributions.

*All costs have been updated to reflect 2021 changes

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Tax benefits and implications of business car leasing

  • What are the tax benefits of business car leasing?
  • What are the tax implications of business car leasing?

Business leasing is one of the most popular ways for business owners to get a new car and it’s a method that has been around for several years.

One of the key reasons that business car leasing is popular is due to the fact that it has a great number of tax benefits. It’s these benefits that will very often sway businesses to choose business leasing over the other methods that are available to them.

So, what exactly are these incredible tax benefits and is there anything you should be aware of before you make any decisions?

In this article, we take a look at the implications of business car leasing and the tax benefits and how they apply to you and your business.

What are the tax benefits of business car leasing?

As we have mentioned previously, there are lots of benefits of business car leasing. Most of these benefits are relevant if you get a vehicle through a Business Contract Lease or Business Contract Hire. These are the most common forms of business leasing, where you have a vehicle, or a fleet of vehicles, for a set period of time while making fixed monthly payments. At the end of your contract, the vehicles are returned and you have nothing more to pay, subject to mileage and condition restrictions.

Many of the tax benefits apply to Business Contract Hire, so this will be the lease option we will talk about in this article.

It’s good for company accounts

Irrespective of the broker or dealership you use, or the vehicle you choose, the biggest advantage to business leasing is that it is tax-efficient, meaning that it’s good for company accounts. This is due to the fact that it doesn’t show up as a liability on your company balance sheet.

Your company balance sheet is important as it’s what other businesses will use to judge whether to give you a credit line.

When you make a major purchase through your business, such as a property or a vehicle, you need to think about how it will impact on your balance sheet. If you decided to purchase a single vehicle, or a fleet of vehicles for your business then this is something that will show up on your balance sheet as a huge liability. If you borrow money to buy several vehicles that cost £25,000 each, it would look like you had borrowed a considerable amount and therefore had a large financial sum against your business. It could, therefore, hinder your chances of borrowing more in the future.

However, if you get the vehicle (or vehicles) with a Business Contract Hire agreement then it won’t show as a liability, or an asset, on your company balance sheet. Instead, it is “off balance sheet”. This is seen as a huge advantage to business as it means that you can apply for more credit lines and the vehicles aren’t seen as a liability.

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You can offset the rental

If you have a limited company, then you can offset the monthly rental against your end of year Corporation Tax. If you’re a sole trader or in a partnership, then you can offset the monthly rental payments against your yearly taxation.

Therefore, business leasing can be seen as very tax efficient.

How much you can offset against the monthly rental depends on the CO2 emissions of the car or cars you are leasing. If the vehicle emits more than 110g/km of CO2 then you can claim 85% back. It if emits less than 110g/km, then you can claim 100% back.

The exception to this is if you have leased a van. If you have then no matter the CO2 emissions of the vehicle, you can always claim 100% of the monthly rental back.

Another advantage is that you can claim back 50% of the initial payment and monthly rentals. This is due to the fact that, technically, you’re renting the vehicle rather than owning it.

You can only claim 50% back, as HMRC assumes that you are using the vehicle for business travel 50% of the time and personal journeys (including your commute to and from the office) for the other 50%. There is, however, one exception and that is if the vehicle is classified as a ‘pool car’.

A pool car is a vehicle that is driven by multiple employees for business purposes, such as travelling to and from meetings or training days. A pool car is also left on business premises overnight and on weekends. If your vehicle is a pool car then you are able to claim 100% back.

If you are claiming that a vehicle is being kept on-site when not in use then you need to be honest, as this is something HMRC will check up on. If you’re claiming 100% back and you use the vehicle for any personal errands, HRMC will find out.

You can claim back on excess mileage and maintenance agreements

When you get a vehicle with a Business Contract Lease, you will also have agreed on a fixed mileage. If you, or your employees, go over the agreed mileage then you will be subject to an excess mileage charge. You will have been made aware of the charges prior to signing your contract and they can be anything from 1p per mile + VAT to £1 per mile + VAT.

It is partly due to the possibility of additional charges that many people opt for higher mileage. However, it’s not always the best decision.

The excess mileage charge is considered a service charge, which means that you can offset 100% of it against Corporation Tax. You can also claim 100% of the VAT back on your VAT return.

With this being the case, it’s definitely worth thinking about leasing a vehicle with lower mileage and paying the excess mileage charge. It can prove to be more tax-efficient, as long as you budget for the excess mileage.

If you decide to get a maintenance agreement for your vehicle, or fleet, then this is also considered a service charge by HMRC.

A maintenance agreement is an additional monthly fee that covers all service costs for the duration of your contract. This could be especially appealing if you have leased a fleet of vehicles.

If you have a maintenance agreement then, according to UK government rules, you can offset 100% against Corporation Tax and 100% of the VAT. This is the case whether you have a lease or purchase agreement.

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What are the tax implications of business leasing?

One of the things that make business leasing so appealing is the fact that there aren’t many tax implications.

However, there is one tax implication that you should definitely be made aware of before you decide whether or not you want to lease company vehicles with business leasing.

You will have to pay more National Insurance

If you’re a sole trader, your business is a limited company, you’re a Director, or in a Partnership then you will have to pay more in National Insurance.

This is due to the fact that you’re providing your employees with a benefit and therefore HMRC says you have to pay more in National Insurance for the benefit. This increase in National Insurance isn’t only if you have a company vehicle, it is the case if you get any benefits from your business.

How much you pay in National Insurance depends entirely on the value of the vehicle.

In conclusion, as we have stated, there are huge tax benefits to business leasing. These include:

Business leasing is a great option if you’re looking for a vehicle, or vehicles, for your company and feel that these tax benefits are ones that will make a difference.

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Business car leasing eligibility

  • Who can get a business car lease?
  • How to qualify for a business car lease
  • What are the business benefits of leasing?

As one of the fastest-growing finance schemes in the UK, it’s unsurprising that the number of businesses that choose to lease their vehicles is on the increase.

There are a huge number of benefits to business leasing, so it’s easy to understand why it has become such an appealing option for businesses when they are looking to get a vehicle or a fleet of vehicles.

But, how do you get a business car lease? Are you eligible?

In this article, we look at what makes you eligible to get a vehicle using a business lease as well as some of the benefits to business leasing.

Who can get a business car lease?

Before we get into the benefits of business leasing, it’s important to know whether you’re eligible. So, can you get a business lease?

There are a number of groups that qualify for a business lease.

If you and/or your business are any of the following, then you qualify for a business vehicle lease:

So, as you can see, there are many ways to be eligible for a business lease. Chances are, if you read this article, then you qualify for business car leasing.

How to qualify for a business car lease

When you lease a car, whether it’s through your business or privately, a credit check is conducted. If you’re a business customer, then your business will undergo a credit check., it may also be that the director or directors of the company may also go through a credit check.

The credit check on your business is because the Finance House needs to be sure that you will be able to meet the commitment of the monthly payments. The easiest way for them to know this is to check your financial history by conducting a credit check.

A credit check of your business will include the Finance House looking over many things about your business including:

A credit report will provide the Finance House with a lot of information about your business and whether you will be able to meet the monthly payments for any vehicle you get on a business car lease, proving your car leasing eligibility.

It is possible that the Finance House may ask for additional information as further reassurance and you will need to be prepared to provide this should it be required. This will maximise your chances of getting finance for a business lease.

What sort of things will I need to show the Finance House?

It’s possible that the Finance House will ask for further evidence of your car leasing eligibility when you apply for a business lease. This additional information could be any of the following:

If your company is new then it’s harder to get finance, but it’s still possible. You should be prepared to provide the Finance House with all the evidence that we have mentioned, however, they will also ask for more. This could include a realistic cash flow forecast. When putting this together, you need to ensure that this forecast is realistic.

The key, here, is to cooperate with the Finance House and show them everything that they need to see. They need to be convinced that you will be able to make the monthly payments.

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Car leasing eligibility: What if my business has bad credit?

If, when checked, your business has bad credit and therefore doesn’t meet the car leasing eligibility requirements, the Finance House will run a credit check on the company director(s). If they have a strong credit score then it’s possible that the Finance House will allow you to lease a vehicle on the condition you have a director’s guarantee. This is essentially where the director agrees to take on the payments in the event that the business can’t. Essentially, they are a guarantor for the business.

You should be aware that if you are a new company or your business has bad credit, you may be asked to make a larger initial payment in order to alleviate the risk in the eyes of the Finance House.

If you would like more information about the possibility of business leasing with bad credit, we have written a more detailed article that may help.

What are the alternatives to business leasing?

If you don’t qualify for business leasing, unable to provide a director’s guarantee or make a larger initial payment, then there are alternatives.

These alternatives include buying your business vehicle, or fleet, through a cash purchase either using cash or a bank loan. Another option is buying a second-hand vehicle, which can be more affordable than buying a brand new car outright.

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What are the business benefits of leasing?

There are a number of benefits to your business when you lease, which is why it’s so popular.

Cash flow

One of the benefits of leasing a car through your business is cash flow. In business, cash is important, and having your cash tied up in a depreciating asset is not ideal, nor is spending a huge amount of cash in one hit. When you lease, your money is not tied up in a depreciating asset and the monthly payments are often much lower than if you were to go through a purchase scheme.

Leasing vehicles for your business frees up funds so you can continue to do your daily business. You also have the freedom to put down as little or as much as you would like as an initial payment. If you would prefer to pay a larger amount initially then you benefit from lower monthly payments. If you pay a smaller amount upfront then your monthly payments will be larger. However, leasing gives you the flexibility and ability to free up money for your business.

Time-saving

This is often a benefit that is overlooked. However, one of the advantages of leasing is that it can save you a huge amount of time.

If you go through a vehicle broker, like OSV, then all you have to do is tell them about your current situation, your requirements and your budget and they will do all the legwork for you.

We will do the research using the requirements you have given us, negotiate some good deals and then present them to you. You can choose which one of the options you feel suits your purpose the best and let us know. It’s that simple.

Running your own business is a time-consuming concern and you don’t always have time to trawl through a multitude of vehicle websites, looking at specifications to find the right vehicle to suit your needs. If you go to a vehicle broker, like OSV, for help then this is a responsibility that we will take on, they will do all the hard work for you and enable you to get on with looking after the day-to-day running of your business.

Tax benefits

A huge benefit of business leasing is the tax benefits, these are mainly seen when you look at Contract Hire agreements, making this a hugely popular scheme for businesses.

If you’re a VAT registered business and you have a vehicle on a Contract Hire agreement then you can claim 50% of the VAT back on the monthly and initial rental in your quarterly VAT return. If you don’t use your vehicle for personal journeys then you can claim 100% back.

You can also offset the rentals against your monthly tax bill, the percentage of which depends on how much CO2 your vehicle emits. If it emits less than 110g/km of CO2 then you can claim 100% back. Any more than that, however, and you can only claim 85% of the rental against profits.It’s important to know that in order to be eligible to lease a vehicle through your business it will need a strong credit score. You should be prepared to show the Finance House your company bank statements and possibly your opening balance sheets in order to prove that you are able to make the monthly payments and therefore meet the car leasing eligibility requirements.

It may also be necessary for you to obtain a director’s guarantee.

At OSV we work with businesses every day and help to get them qualified for business leasing. If you have any questions at all about business car leasing, whether it’s eligibility or anything else, contact us and we can help.

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What is Vehicle Excise Duty

  • History of Vehicle Excise Duty
  • When did vehicle tax change?
  • What are the first-year VED charges?
  • How much VED will I have to pay after the first year?

Vehicle Excise Duty or VED is more commonly referred to as Road Tax. It’s a tax levied by the UK Government to drivers and motorcyclists (though the latter pay at a different rate than is mentioned in this article) and brings in an estimated £730 million every year in revenue.

The tax is collected by the Driver and Vehicle Licensing Agency (DVLA), a government department that keeps records of all drivers and vehicles on UK roads.

However, funds from Vehicle Excise Duty are not reserved for the upkeep of Britain’s roads, this is now covered by payments from Council Tax and general taxation.

History of Vehicle Excise Duty

Vehicle Tax was first introduced to road users in the UK in 1888, however, this was not a tax specifically for drivers of motor vehicles, that particular tax wasn’t created until 32 years later, in 1920. This tax was paid into the Road Fund, which was used solely for the construction and maintenance of the road system.

In 1937, the Government ended the payment of Vehicle Tax into the Road Fund, instead paying the revenue into the Consolidated Fund, which is where all funds from general taxation (including income tax, corporation tax and fuel duty) go. This means that the funds paid through Vehicle Excise Duty are no longer reserved solely for the purpose of repairing or constructing roads across the UK.

When did vehicle tax change?

In April 2017, big changes happened to the Vehicle Excise Duty system. The system that had been running up until this point had been introduced in 2001 and worked on vehicle emissions in the hope of reducing the desire for cars that had higher pollution levels.

This premise remained the same for cars already on the road when changes happened in April. However, new cars purchased after April 2017 are subject to the new VED costs. There is a first-year rate now that sees some higher polluting cars incurring a charge of just over £2,000. Only zero-emission (all-electric or hydrogen fuel-cell) cars are exempt.

Vehicles with a list price of more than £40,000 are also subject to a further cost added to their Vehicle Excise Duty, vehicles with 0% emissions are not exempt from this expense.

What are the first-year VED charges?

The first-year charges for your car depend greatly on the vehicle you drive. The difference in first-year costs between driving a Nissan Leaf or a Porsche 911 is vast due to their very different CO2 emissions.

In the table below you’ll see just how much a higher polluting car is going to cost in the first year payment alone. If you’re buying or leasing a new car then you’ll need to know these first-year rates. The impact they have on overall running costs are substantial and being aware of them in advance will help you to budget better.

Vehicle Excise Duty

How much VED will I have to pay after the first year?

Once you’ve made your first-year payment all cars go onto a standard rate. The rate you will pay depends on your vehicle’s fuel type.

Vehicle Excise Duty

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Vehicle Excise Duty for older vehicles

If you drive a car that was registered on or before 1 March 2001 then you will continue to pay VED at the rate you have been accustomed to. This rate is calculated based upon cubic centimetres meaning that engines smaller than 1549cc or approx 1.5 litres must pay £160 per year if they pay for 12 months up-front.

Older cars with larger engines are required to pay £265 per year.

On this scheme of VED you are incentivised to pay upfront to get the better deal. If you elect to pay in 6-month instalments then the price may vary slightly. If you would like to find out the full breakdown of the charges they are available and regularly updated on the DVLA website.

Vehicle Excise Duty for newer vehicles

We’ve already given you the low down on brand new cars, but if your car was purchased new after 1 March 2001 then your VED rate is calculated differently.

For newer cars, it’s all about how much CO2 your car emits; the higher the g/km, the higher the amount you’ll pay.

Vehicle excise duty - road tax badge

Petrol and diesel cars are the most common vehicles taxed. The VED calculation is broken down into bands and the cars are categorised into these bands based upon their CO2 emissions.

The prices below are based upon paying for 12 months VED up-front for diesel, petrol and alternative fuel cars. However, there are other payment options, including paying over 12 months by Direct Debit and the amount payable for these options will differ.

Vehicle Excise Duty - 2001-2017

Are there any other costs?

As we’ve previously mentioned, if your vehicle has a list price (the published price of your car before any discounts) of more than £40,000 there will be an additional sum added to your annual VED payment. This rate is only payable from the second time the vehicle is taxed and only for the first 5 years you have the car.

In the table below we have highlighted the cost if you were to make the full payment in one go, though there are other options should you wish to spread the payments out across the year.

Vehicle Excise Duty payment for luxury vehicles with a value of over £40,000

*As of 1 April 2020, all 100% electric vehicles with a list price of over £40,000 are exempt from paying the additional Luxury Vehicle Tax.

How do I pay Vehicle Excise Duty?

Paying your VED can be done in a variety of ways. The quickest and easiest solution is to pay online by debit or credit card. When making an online payment you will need at least one of these documents to hand.

The car’s V5C registration document or the V5C/2 new keeper supplement if you’ve only just bought the car.

The V11 reminder letter or your last-chance warning letter from the DVLA.

Alternatively, you can pay over the phone by calling 0300 123 4321. This call is charged at your local rate.

It’s also possible to pay at the Post Office. If you choose this option, you’ll also need to bring some documentation with you.

You will need to bring one of the following documents:

You will also need to provide your:

Note: In Northern Ireland, you’ll need to bring your insurance certificate or cover note.

What vehicles are exempt from paying Vehicle Excise Duty?

Not all vehicles on the road are required to pay vehicle excise duty. Here’s the complete list of all vehicles exempt from paying vehicle tax.

It’s important to remember that even if you don’t have to pay any Vehicle Excise Duty you will still need to register your vehicle.

What does it mean if a car is SORN?

You can own a car that is not driven on public roads and in this case you are also exempt from paying Vehicle Excise Duty. You must, however, declare it to the DVLA. This declaration is known as a Statutory Off-Road Notification or SORN. If you don’t declare your off-road vehicle as SORN then you will be liable for paying VED on it.

What else do I need to know about Vehicle Excise Duty?

You no longer receive a tax disc to display in your car windscreen once you’ve paid your VED. This was abolished in October 2014 as part of a drive to save money. It’s certainly a greener approach and means you don’t have to wait for a tax disc to arrive in the post to display in the corner of your windscreen. However, the long-term benefits to this change have yet to be discovered.

Another important change is that you can no longer buy a car pre-taxed. Previously, some second-hand car dealers would include 6 months’ tax on a car as a buyer incentive to help close the deal. It was also possible to sell a car with VED if you were selling it mid-way through the valid tax period. However, in 2014 this also changed, new owners must tax the vehicle themselves before they can drive it.

All costs in this article are valid as of 06/04/2021

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Business car leasing credit requirements

  • Who qualifies for business leasing?
  • What are the credit requirements for business leasing?
  • What does a credit report show?
  • How can I improve my company credit score?

If you’re doing research into getting a business car lease, then it’s likely you’re thinking about what sort of credit requirements you’ll need to meet in order to qualify.

When you lease a car, regardless of whether you are leasing through a business or privately, you will have to go through a credit check. This is because the Finance House providing the funding for your lease will need to know that you can make the payments. The best way to do this is for them to take a look at your credit history.

When you lease through your business, the process is very similar, though you will need to provide further details as the Finance House will need to look into the business’s credit history. Depending on the results of this they may also need to check the company director’s finance history too.

So, what are the credit requirements of business car leasing? In this article, we look at the credit requirements you will need for business car leasing, and how to improve your company’s credit score.

Who qualifies for business car leasing?

Before we begin, do you qualify to get a business car lease?

You qualify for business car leasing if you are:

So, if you’re considering business car leasing then, as you can see, it’s not only for your business if you’re a limited company.

Have questions about the different finance options available? Download our Ultimate Guide to Leasing.

What are the credit requirements for Business Car Leasing?

Getting a business car lease is not as simple as just being a PLC or a sole trader. You still have to go through a credit check. This means that you will need to meet certain requirements before you qualify for business leasing.

First and foremost, your business needs to have a good credit score. A credit check is carried out by an automated system that will simply look at your score and judge whether you qualify for the finance you are applying for based on that piece of information. However, the Finance House may also look at your credit score after the check has been completed and request more information.

This might be because they need reassurance that you are going to be able to meet the payments.

If you are asked to provide more information then it is likely to be some (or all) of the following:

It’s also worth being aware that there should be no county court judgements (CCJs) on your credit history.

If the credit score for your business is very strong, then chances are you won’t be asked to provide any further information as the credit score will be enough to convince the Finance House that your company will be able to make the monthly payments. However, you should be prepared to show the evidence if it is requested.

What are the credit requirements for business car leasing for a new company?

If your company is still new, then it’s a little more difficult to get approval for a business car lease. This is due to the fact that your business won’t have a very long credit history – if any at all. Because of this, the Finance House has very little reassurance that you will be able to meet the regular monthly payments. However, it’s not impossible.

In order to maximise your chances of getting a business car lease, you should be prepared to provide the Finance House with all the information we have already mentioned, but you should also be prepared to go above and beyond. This may include showing them a realistic cash flow forecast. If you provide the Finance House with a forecast that is unrealistic then it won’t be taken seriously, which will impact your chances of getting a business lease.

The more information you are willing to show the Finance House, the more likely you are to be able to convince them that you will be able to make the monthly payments.

Credit requirements: Can I get a business lease if I have bad credit?

If you personally have bad credit, but your business has a very strong credit score, then it may still be possible to obtain finance approval but this will depend on which finance house is used – there are a couple that we know of, that do not check Director’s details.

If the credit for your business is checked and turns out that you have bad credit, then this could make things a little more difficult. A credit check will be carried out on the director or directors. If they have a strong credit score, then it’s likely that the Finance House will ask for a Director’s Personal Guarantee, or a DPG. Essentially, the director(s) promise that they will cover the monthly payments should the business be unable to meet them.

The DPG is a further reassurance for the Finance House and it also shows that the director(s) has confidence in the business’s success.

If it’s possible for you to provide a Director’s Personal Guarantee this will greatly increase your chances of getting a business car lease.

It’s also worth being aware that if your business is new, or it has a poor credit score then you may be required to put down a higher initial payment. This will alleviate the risk for the Finance House.

It may also turn out that you are unable to get the lowest price because you are a higher risk to the Finance House.

If your business is new, a start-up or has bad credit then we recommend you call us, we are an experienced broker that helps businesses that have many different financial situations every single day. We can talk you through all the information you will need to provide when applying for vehicle finance and help you to get the best deal available given your individual circumstances.

Want to speak to someone about your business finance needs? Contact us now to speak with one of our specialists.

What does a business credit report show?

So what does the Finance House look for when it checks your credit score? What does a credit report show for your business?

A business credit report tells the Finance House a considerable amount about your company, including:

As you can see, a company credit report provides quite a bit of information and gives the Finance House a good idea of whether your business will be able to make the monthly payments or not.

How can I improve my company credit score?

How do you improve your company’s credit score? Luckily, there are quite a few ways that you can do this, though they can take time, they include ensuring you:

When you apply for a business car lease, a credit check will be conducted on your business. This is to reassure the Finance House that you can make the monthly payments. If your company has a strong credit score, then there will be no problem when it comes to qualifying for car finance. However, if the credit score is poor, or your company is new, then it’s likely you’ll be asked to provide the Finance House with more information that shows you can meet the monthly payments. It’s possible that you will also be asked to get a Director’s Guarantee

If you have any questions about business finance, we can help. At OSV we work with businesses every day, helping them to qualify for finance.

WANT TO KNOW MORE ABOUT BUSINESS FINANCE?

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What are the best vans for business leasing?

  • Which is the best manufacturer of business vans?
  • How does van leasing work?

Vans have long been a trusty tool for workers and private individuals. They are ideal for transporting small items, perfect for sole traders and great if you need to take slightly larger pieces of equipment to a job as a gardener or plumber.

We’re going to acknowledge here that there isn’t enough information out there about vans. When you’re looking for detail about buying or leasing, the vast majority of the data is about cars.

When looking for a new van it’s sometimes not easy to know where to start your search. Of course, there are several things that you have to consider including payload and practicality, as well as other things depending on where you will be travelling (such as emissions for low-emission zones). Once you have a better idea of what you’re looking for in a new van, the search can start.

So, which manufacturer produces the best vans for business? In this article we take a look at the car makers that make the best vans and what makes them the right van for your needs. We also take a look at van leasing.

Which is the best manufacturer of business vans?

Before we start, we need to clarify that this is simply our opinion. There are a lot of manufacturers out there that may be much better suited to the needs of you and your business.

We aren’t going to be rating them in any particular order, as they all produce good vans that may meet your individual business needs.

Ford

Ford has long been popular with van drivers and over the years it’s produced some really good models, including two of our all-time favourites, the Transit and the Transit Connect.

Vans for business leasing - Ford Transit

Ford Transit

Another favourite, the Ford Transit is the best-selling commercial vehicle in the UK and won Van of the Year by AutoExpress three years in a row. It is hugely affordable in all aspects including financing, insurance and running costs and it drives very well. In the L2 and L3 vans, there is room for up to four Euro pallets. The L2 van has a load length of 3.04m and the L3 van is marginally smaller with a length of 3.49m. In the larger L4 van you can fit up to 5 of the pallets and, with additional load length, you can stow a load of up to 4.21m in size.

The payload for the Transit varies depending greatly on which variant you decide to lease or purchase. The lightest front-wheel-drive Transit has an impressive payload that is 1,445kg (almost 1.5 tonnes). It also has a very good number of safety features including Adaptive Cruise Control and Pre-Collision Assist.

The Transit is now available as a plug-in hybrid, and Ford has announced the popular van will be available as a fully electric vehicle with a 217-mile range between charges at some point in 2022.

Ford Transit Connect

If you’re someone who favours the smaller van then this one is a great option. The Ford Transit Connect has been one that many van drivers will choose out of a line-up. It’s often ranked as one of the best small vans on the market and, being honest, we aren’t surprised.

The design of the Transit Connect is definitely practical and user-friendly, including a load-through bulkhead that can allow you to carry items that are up to 3m long even if you have a short-wheelbase van, this increases to 3.4m if you select the long-wheelbase option.

There is also a flip-up hatch at the bottom which enables you to slide long items into a storage area that is beneath the front passenger seat. Behind the bulkhead, there is room for Euro pallets. In the short-wheelbase version. If you decide on the long-wheelspace van then there is enough space for two or four 8x4ft sheets.

With a payload of up to 967kg and side-wall mounted tie-down points that help to keep the load floor clear this one is great if you’re looking for a practical vehicle with flexible storage space

Just like the Ford Transit, the Transit Connect comes with a number of safety features that include Active City Stop and Traffic Sign Recognition. The van also comes with an infotainment system that works with Apple CarPlay and Android Auto.

Want to talk about the Ford Transit or Transit Connect? Call our team of Vehicle Specialists on 01903 538835, or request a callback.

Volkswagen

Volkswagen is another manufacturer that has gained a loyal following amongst van drivers, and it has plenty of vans on offer for a range of different purposes.

Vans for business leasing - Volkswagen

Volkswagen Caddy

The Volkswagen Caddy is slightly pricier than others in its class, but according to a large number of people, it’s worth the additional expense.

Being a Volkswagen you expect it to be reliable and the advantage with this is that the Caddy has a really good resale value. This comes in handy if you are planning on selling it on (Finance Lease). Of course, if you’re looking to get a used van, the high resale value of a Caddy means that you will end up paying more to invest in one.

The panel van has a load capacity of up to 3.2m2. The Caddy Maxi Panel van is slightly larger and has a load capacity of up to 4.2m2.

You have the option of adding lashing rails and rings, as well as a rubber floor, which will make for easy cleaning. The rubber floor also helps with insulation and sound-dampening.

The Volkswagen Caddy also comes with a number of safety features, plus an integrated infotainment system for those long days sitting in traffic or driving to jobs.

Volkswagen Transporter 6.1

This is the update on the incredibly iconic and popular T6 that was available for more than 70 years. The T6 was incredibly popular with the self-employed and Volkswagen is hoping that the updated Transporter 6.1 will also win your heart.

There are two variants available, the Startline and the Highline. The Startline is the entry level model, however with multiple options available in both variants you the payload and load volume are generous. The payload is between 713kg to 1,309kg and the load volume is up to 9.3m2.

If you wish to customise your Transporter then there are many options available including lashing rings, electric tailgate, carpet or rubber flooring in the rear and integrated infotainment and SAT NAV system.

As of 2020, Volkswagen also started to produce the ABT e-Transporter, a fully-electric Transporter with a range of 82 miles between charges.

Volkswagen Crafter

The Volkswagen Crafter is, according to Volkswagen ‘a commercial vehicle like no other’ and the fact that in 2017 it won the International Van of the Year seems to back that up quite well.

The Crafter comes has two variants with multiple configurations. It has wide sliding doors, that can open up to 1,311mm and also has the benefit of a high load compartment height of up to 2,196mm. Added to that, the loading sill can also be lowered by 100mm, making it great if you’re trying to load something just a little bit unwieldy or heavy. Depending on the model you choose the payload varies, ranging from 735kg to 1,454kg.

The Crafter also comes with a lot of safety equipment including Park Assist, Side Protection and Rear Traffic Assistance.

Have questions about Volkswagen vans? Request a callback from our team of vehicle specialists or call them now on 01903 538835.

Renault

Renault has been making practical and affordable vans for a long time. Its vans are popular with businesses and van drivers because they are affordable and have a strong reputation for reliability. The company is also paving the way for electric vans, and the electric Kangoo is becoming increasingly popular.

Renault Kangoo

The Renault Kangoo is a popular small van and is hugely customisable.

With a low load threshold and a load volume of up to 3.6m2, it has a multi-positional bulkhead and ply-lining that can protect the interior of the van against damage from cargo. The Kangoo also comes with a rear roof flap that allows for vertical storage of oversized objects. Other features include rear parking assist and USB and AUX ports.

If you want an electric van, then the Renault Kangoo could be just what you’re looking for. Electric vans aren’t as advanced as electric cars just yet, but with more low emission zones being introduced in cities across the country, we’re sure that they will become more advanced and more popular in the years to come. The Kangoo ZE has a range of 170 miles.

Renault Master

If you’re looking for something bigger but equally as affordable, then the Renault Master could be for you. It has a load volume of up to 17m2 and payloads of up to 2,167kg depending on what model you go for. It comes in 4 lengths and 3 heights and has a maximum width of 1,380mm, meaning it can transport 4 euro pallets. The rear-wheel-drive versions are able to transport up to 5 euro pallets. The rear doors open at 270° (optional).

You can customise the vehicle with some optional extras including an integrated touchscreen system that includes navigation.

Citroen

Another hugely popular brand for van drivers, Citroen offers a range of affordable vans in a range of sizes.

Citroen Berlingo

More commonly thought of as a family vehicle the Berlingo can also be purchased as a van with a payload of up to 850kg, which equates to an available volume of up to 4.10m2. It also has an available length of up to 3.25m and a width between wheel arches of 1.23m.

The van is available in two lengths and offers smart access points that include large sliding doors and asymmetric rear doors that open to 180°. With the larger version of the Berlingo, 2 EuroPallets can fit comfortably in the loading space.

The Berlingo features a touchscreen tablet that comes with navigation displaying speed limits and traffic conditions as well as extra media features including streaming and voice recognition.

Citroen Dispatch

If you’re looking for something a bit bigger, then the Citroen Dispatch is a great option. It comes with optional hands-free sliding side doors and a payload of up to 1400kg. In terms of volume, the Dispatch offers up to 6.6㎥ of useful volume and up to 4m of useful length. There is also 1.25m between wheel arches. The Dispatch can also pull up to 2.5 tonnes of trailer if you need to transport additional items.

In terms of safety and technology, the Dispatch comes with Grip Control that optimises the traction of the front wheels according to terrain, and a Heads-Up Display. The Heads-Up Display shows essential driving information such as current and recommended speed, navigation instructions and collision risk alerts, on a transparent section in your field of view. This allows you to keep your eyes on the road but still get all the information you need. It also comes with Blind-Spot Monitoring and Active Safety Brake.

Peugeot

Peugeot has gained a loyal following for its vans and is following in Renault’s footsteps with a fully-electric version of the Partner.

Peugeot Partner

Sitting in the middle of Peugeot’s van range, the Partner has two versions but sit on the same length wheelbase. Depending on what version you go for, you can have a payload of either 750kg or 850kg and the load volume can reach up to 3.7m2 and can come with a Multi-Flex passenger seat and a cage bulkhead that folds around the driver.

There are also more safety features in the latest Partner including Active City Brake, parking sensors and a reversing camera. You can also get an infotainment system on the higher trims.

The electric version of the Partner has a range of 106 miles, with a battery and drivetrain warranty of 5 years and 40,000 miles.

Peugeot Boxer

The Boxer is larger than the Partner, so if you’re looking for something a little bigger than this one is for you. With a payload that ranges from 1,115kg up to 1,900kg and a load volume between 8m2 and 17m2 (long-wheelbase), you’re definitely getting a spacious vehicle. In fact, it has one of the highest load-carrying capacities in its class.

The gross weight of the Boxer extends from 3,000kg (3 tonnes) to 4,005kg, however, it’s worth being aware that this higher weight limit does put the van into the HGV licence category.

The Boxer has one of the widest load widths in its class at 1,870mm and the interior height reaches 2,171mm. You can also fit a  Euro pallet in widthways, with a side-door width of 1,250mm. You also get a full-height steel bulkhead as standard.

If you’re focusing on the safety equipment that comes with the Boxer, then it’s worth knowing that they come with Electronic Stability Control with Hill Start Assist as standard, along with ABS and Emergency Brake Assist.

So there are our top brands for vans and some of the most popular vans they produce. As we said, these aren’t the only makes and models on the market but they are our favourite.

Have questions about Finance options available? Download our article all about leasing by filling in the form below

How does van leasing work?

It’s very common for businesses to lease vans, and this is because there are so many benefits. These include:

You can read more about company car tax for vans here. So those are some of the benefits of leasing your company vehicle, particularly if you are leasing a van.

What lease contract would be best for me?

Many people that lease vans tend to choose a Finance Lease. This is a contract that does not have any mileage or wear and tear restrictions, so is perfect for vans who are doing excessively high mileage or will suffer from slightly more damage. It is also perfect for vans with expensive conversion units, such as refrigeration units.

You pay a monthly fee for a set period of time. Once that time is up, you are responsible for selling the van on. The money you receive from selling the van on will then go to your final balloon payment. If you sell the van for more, you get to keep the equity but if you sell it for less then you will have to top it up yourself. Alternatively, you can pay a small fee, usually one monthly payment, and extend your contract.

Hopefully this has given you an idea of the best brands for business vans, as well as giving you some brief information on van leasing. As we said, these aren’t the only great vans on the market, but they are our favourites and ones we definitely think you should have a look at.

WANT TO LEASE A NEW VAN?

Contact our vehicle experts by filling in the form below, or call us on 01903 538835

The best vehicles for business leasing

  • What are the business benefits of leasing a car?
  • What are the best vehicles for business leasing?

Over the last few years Business Leasing has grown more popular and it doesn’t appear that it’s an option that will be disappearing any time soon.

If you’re looking for a vehicle, or vehicles, for your business then the great news is that there are so many models out there to choose from that are perfect for businesses. Though this is good news, the wide selection can make it difficult to decide exactly which one fits your business needs.

And that’s how we can help you. In this article, we’re going to take a look at the best vehicles available and talk a little about the benefits of business leasing.

What are the best vehicles for business leasing

We need to stress here that these are just our choices and just a few of the vehicles available. There are so many different vehicles to choose from and it’s all down to personal preference and your individual requirements when you come to making your decision.

The following vehicles are our top picks when it comes to business leasing.

BMW 5 Series

BMW makes vehicles that are great for businesses, and they are incredibly popular with our business and personal leasing customers.

The 5 Series is a great premium saloon, with a stylish exterior and a comfortable interior. It’s the perfect choice if you’re looking for vehicles for your executive team that will impress clients and give a good first (and second) impression of your company, which is incredible to look at and to drive.

As well as being nice to look at, the 5 Series is also rather efficient and emits 145g/km of CO2, so it won’t cost you a massive amount when it comes to Company Car Tax.

BMW 5 Series

As it’s a BMW you know that it will also come with a significant number of pieces of equipment as standard, such as front heated seats, ambient lighting, and Parking Assist. All this will definitely help to keep the price of customisation down. If you’re looking for additional safety and driver assist features, then BMW offers some great options which will help to keep you and/or your employees safe and happy.

Because BMW vehicles are a popular option when it comes to leasing, there are often some really great deals to be had on them. All of this makes the 5 Series – and other vehicles from the manufacturer, a great choice.

Interested in a BMW 5 Series? Contact our experienced vehicle specialists today by requesting a callback, or calling us now on 01903 538835.

Mercedes C-Class Saloon

Another firm favourite amongst businesses is the Mercedes C-Class Saloon.

Cars for business lease - Mercedes

It’s a Mercedes, so you know it has a sleek and professional exterior and drives like a dream. However, these aren’t the only reasons we’ve included the C-Class on our list. The C-Class Saloon is also available as a plug-in hybrid. The entry-level Mercedes C-Class emits 153g/km of CO2, but the hybrid version has much lower emissions, with the C300 e-Sport Edition Saloon emitting just 34g/km of CO2 and combining a 211bhp petrol engine with a 122bhp electric motor that can go from 0-62 in an impressive 5.4 seconds.

Want to find out more about the Mercedes C-Class Saloon? Call us on 01903 538835, or request a callback from one of our team.

Audi A3 Hatchback

Audi is a hugely popular manufacturer for businesses, which makes their range a great option for business leasing.

The A3 is the perfect mid-sized car that all employees will be happy with. Like its fellow German counterparts, the Audi A3 is well-built, drives well and looks the part. It’s executive looking but also practical, making it great for both city and motorway driving.

Business cars for leasing - Audi A3

There are a range of engines and specifications you can choose from, as well as heaps of optional extras. What else would you expect from an Audi?

At the beginning of 2021, as well as building their fully-electric e-Tron range, Audi released a plug-in petrol hybrid A3 Sportback, the e-TFSI that can go up to 282.5 miles to the gallon thanks to a fully-electric range of 41 miles.

Looking at an Audi for your business? Contact our experienced team by requesting a callback, or calling us now on 01903 538835

Volkswagen Golf

If you’re looking for something smaller, then it’s worth taking a look at the Volkswagen Golf.

It’s one of the most popular cars on the market and has been around since the 1970s. There are some great lease deals to be had on the Golf, especially if you’re searching for a new business lease. There are plenty of different specifications and engines to choose from so it can be customised to meet a considerable number of requirements.

The Golf comes with a lot of equipment as standard (depending on the trim you select), including a navigation system, infotainment system, parking sensors and adaptive cruise control.

Think that the Volkswagen Golf is the right vehicle for your business? Get in touch with us to find out what offers we have available. Request a callback or call us on 01903 538835

Ford Focus

The Ford Focus has long been a favourite amongst businesses and things don’t look like they’ll be changing any time soon. There are so many things you can praise about Ford, and its ability to make practical cars that are also enjoyable to drive is definitely one of them.

Due to the popularity of the Focus, there are always great deals to be had, which means you are likely to get a great business lease deal on one (or more if you’re looking for a fleet).

The Focus also comes with the equipment you would expect in a Ford, plus the bonus that the model is a fun and comfortable ride. Ultimately, the Ford Focus does exactly what it is supposed to, and it does it well.[vc_column_inner width=”2/3″]

Like Ford? Contact us to find out what we have available. Request a callback or call us on 01903 538835

Lexus ES

If you’re looking for a luxury car that is slightly different from the norm, then the Lexus ES is perfect. It only comes as a hybrid which will reduce the cost of your Company Car Tax and it looks like a premium car, because it is.

Lexus also produces highly reliable vehicles, which is a huge benefit if this is a key deciding factor. There are also some great lease offers available, if Lexus is the brand that you’re looking at. Lexus, for all that it has a reputation for producing reliable and good-looking vehicles, is incredibly underrated, ignored for other manufacturers. But the truth is, you can’t go wrong with the efficiency, economy, style and reliability of a Lexus.

Like the look of Lexus? Request a callback from one of our vehicle experts or call us now on 01903 538835

BMW 330e

Audi, Mercedes and Lexus aren’t the only luxury brands that have started the journey into the hybrid world, venturing into the world of hybrids. This BMW 330e is a plug-in hybrid that blends in nicely with the rest of the BMW line-up.

Emitting just 32g/km of CO2, the 330e sits in the fifth BIK band for business users which can make it a very appealing option. What it loses in CO² emissions it gains in speed as it can reach 0-62mph in 5.8 seconds. This is considerably faster than the petrol and diesel models, which take 8.4 seconds.

Another advantage is that, like other BMWs, it looks good. It’s completely silent when relying solely on electricity and comes with a lot of extras, like any BMW.

So these are just some of our top picks for a business lease. Again, these are just our opinion and there are plenty of other vehicles that will meet your needs and may be more suited to your individual situation.

Interested in a BMW? Request a callback from one of our vehicle experts or call us now on 01903 538835

What are the business benefits of leasing a car?

There are a lot of benefits to leasing a vehicle for your business and we do talk about these in more detail in our article about the benefits of business leasing. However, they include:

We hope that this has given you some idea of the cars that you should be looking for when it comes to business leasing.

As we’ve said, these aren’t the only ones available to you, though these are the ones that we think would make the best company cars and there are often really good offers on them.

There are a lot of benefits to getting a vehicle on a business lease and the information we’ve shared should give you a great insight into what you should be looking for.

LOOKING FOR A NEW BUSINESS VEHICLE?

Contact our vehicle experts by requesting a callback or calling us now on 01903 538835

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