There are multiple different ways for a business to fund their vehicles. But what makes leasing so special? 

When it comes to funding vehicles for your business, the choices can feel as endless as those pesky Monday morning emails.

So, why does business car leasing stand out? 

Two words: time and money.

These are the holy grails of running a business – and leasing gives you more of both. Think of business leasing as the ultimate multitasker. It delivers tax savings, improves cash flow, and wraps it all up with the convenience of a shiny new car.

It’s not just practical; it’s a win-win for your employees’ safety and your company’s image.

Let’s be honest. No one wants to pull up to a client meeting in a car that’s seen better days. Leasing lets you leave the old clunker behind and put your best (four) wheels forward.

Ready to dive into the perks? Here are five solid reasons why leasing a car for your business might just be the smartest move you make.

man in suit excited

Tax savings

Reclaim VAT

If your business is VAT registered, you can reclaim a portion of the tax paid on your lease.

Use the car only for work? Reclaim 100%.

Mix in personal trips? You still get 50%.

Add a maintenance package, and reclaim 100% of that, VAT regardless.

Offset lease costs

Leasing is tax efficient. Payments count as expenses, meaning a smaller tax bill.

If you drive a car emitting less than 110g/km of CO2, you can claim 100% of lease rentals. If your vehicle has higher emissions? You can still claim 85%. Even running costs like fuel and insurance are deductible.

Leasing doesn’t just save money – it saves you from financial headaches.

woman in suit standing next to car smiling

Free Up Capital

Initial investment

Why sink a fortune into buying when you can lease with a smaller initial payment? Sometimes, all it takes is one month’s cost upfront. Predictable monthly payments make budgeting simple.

Add a maintenance package, and you’re free from surprise repair bills.

Leasing keeps your funds available for other investments. Or maybe a top-tier coffee machine for the office.

We won’t judge.

Total cost of leasing

Imagine if leasing cost more than buying outright. That’d be a deal-breaker, right? 

Luckily, it’s pure fiction.

Lease costs are based on depreciation, which is set at the start of your agreement. While you might pay some borrowing costs, the depreciation value is locked in, so the risk sits with the funder – not you.

Whether you lease or buy, all cars depreciate in value, especially in those early years. But here’s the kicker: you only pay for the depreciation value when leasing, so interest costs are lower.

Plus, leasing usually includes road tax and delivery fees. At the end of the term, there’s no faff of selling – just hand the car back.

When you crunch the numbers, leasing often saves money and time compared to buying and selling over the same period.

Reduced running costs

New cars mean fewer breakdowns. Plus, manufacturer warranties typically cover three years, or the first 60,000 miles.

MOTs? Not needed for the first three years.

Road tax? Handled by the funder.

New vehicles are also more fuel-efficient, saving you money at the pump. That’s good news for your wallet, the planet, and your company’s CSR strategy.

Everyone wins.

woman in car looking back smiling

Positive representation of your business

A sleek car is like a tailored suit – it sends a strong message.

For clients, it’s a sign of professionalism.

For staff, it’s about safety, modernity, and motivation.

Leased vehicles offer the latest tech and safety features, ensuring employees drive in style and comfort. Happy workers are productive workers – and no one’s inspired by an ancient, rattling estate car.

woman dressed smart getting in car

Discounts based on volume purchases

The leasing market is a competitive one with lots of brokers vying for your business. Not only is this great for driving down rates, but also gives you increased negotiation power.

Here at Carparison, we pride ourselves on advertising our best rates first time. That being said, our live rates are linked to the volumes we put through both our funder and dealer partners. The bigger the order, the lower we can negotiate costs.

Businesses frequently benefit from increased discounts when making volume orders that simply would not be possible for customers opting for a personal lease.

business man standing next to EV car on charge

Cons of leasing for businesses

Leasing isn’t all smooth roads – there are a few speed bumps to keep in mind.

  • Mileage limits: If you go over your agreed mileage, there’s a fee to pay at the end of your lease. So, if your team’s hitting the road more than expected, keep an eye on those odometers
  • Early termination fees: Life happens, but breaking a lease early can come with charges
  • Fair Wear and Tear: Leased cars need to be returned in a condition that matches their age and mileage. Any damage beyond normal wear and tear? You’ll be charged. But don’t worry, the BVRLA Fair Wear and Tear Guide sets the standard for that which you can easily access online

For businesses with unpredictable vehicle needs or a risk of heavy wear and tear, leasing might not be the best route. But for most, the pros far outweigh the cons.

What’s the verdict?

Business leasing is practical, cost-effective, and easy. It improves cash flow, enhances your image, and keeps employees happy.

It’s not for everyone. If your vehicle needs vary or there’s a risk of heavy damage, it might not suit. But for those confident in their requirements, leasing a car is a no-brainer.

Ready to upgrade your fleet? With leasing, you’ll be driving into the future – and leaving old bangers in the dust.

Think leasing is right for your business?

Sarah Hunt

Sarah Hunt

Sarah is the Head of Marketing and she's tasked with keeping the fantastic marketing team in line. She's probably the reason you've heard of us, and her wealth of marketing experience means that no challenge is too big.