Benefits of electric car leasing for businesses

Future-proof your business with electric vehicles

In a rapidly changing landscape, businesses are recognising the role of sustainability in their long-term success.

And, although the UK ban on the sale of new petrol and diesel vehicles was pushed back to 2035, one avenue that is still gaining traction is the adoption of electric vehicles.

Business car leasing in particular has plenty of benefits; it’s economical, provides tax benefits, and can improve cash flow.

But opt for an electric car business lease and you can drive even more positive outcomes for your business.

Lower upfront investment

Firstly, the benefit of electric car leasing is that it gives businesses who might not have the funds to buy an electric car outright the chance to drive a brand-new EV for a fraction of the price.

It means that the money that would have been put towards buying an electric car can instead be used elsewhere in your business. 

Tax incentives

Those who use electric vehicles for business purposes benefit from lower Benefit-in-Kind (Bik) tax rates.

BiK tax is based on the vehicle's carbon emissions, so electric vehicles fall into the lower tax bands because they have no tailpipe emissions.

The BiK rate for electric cars rose from 1% to 2% back in April 2022. This rate remains fixed at 2% until April 2025.

But from April 2025 onwards, the BiK rate will increase by 1% annually until 2028.

Even though you still have to pay some tax, it’s a lot cheaper than you would pay for a hybrid or petrol vehicle.

When businesses choose an electric car lease, they can also claim VAT back on the monthly instalments. If your cars are used for business purposes only, you can claim 100% VAT back. If the cars are used for personal use too, then you can only claim back 50% VAT.

Lower maintenance expenses

You won’t need to worry about your business lease cars not passing their MOTs because your lease term is likely to be three years or less, so you won’t have to pay for an MOT or deal with getting them fixed.

EVs also have fewer moving parts, so they’re a lot easier to maintain. Meaning you’re unlikely to be visiting a garage as often.

Adding a maintenance package onto your lease agreement is also a great option to consider if you prefer to be safe than sorry. A maintenance contract covers servicing, MOT and routine wear and tear items; giving you both peace of mind and cost savings over the agreed term.

No congestion and clean air zone charges

There are several areas in the UK that have imposed congestion charges or implemented clean air zones to alleviate traffic congestion and reduce emissions.

However, electric vehicles are often exempt from these charges as part of efforts to incentivise their adoption and promote cleaner transportation alternatives.

By leasing electric cars for business use, companies can capitalise on these exemptions, thereby avoiding substantial congestion charges that would otherwise impact their operations.

Brand-new EV every few years

Since the marketplace is changing rapidly and there’s constantly new electric vehicles hitting the market, leasing an EV means you aren’t tying yourself to a vehicle for too long.

There’s no worrying about electric car depreciation and you don’t need to worry about getting rid of the vehicle either, as you just hand your EV back at the end of your term.

You won’t need to worry about its resale value and not getting much money back as its residual value is taken into account when your monthly lease payments are worked out.

Residual value is based on what the car is expected to be worth at the end of its lease term.

Enhance your business reputation

Electric car business leasing offers more than just financial and environmental benefits - it also presents a powerful opportunity to elevate your business reputation.

By switching to an electric fleet, you’re demonstrating that you have a strong and active commitment to sustainability.

This is a great way to attract like-minded employees, enhance retention and boost employee engagement too.

Why choose Carparison?

Here at Carparison, we have a wide range of deals to choose from.

We partner with a long list of funders and dealers to ensure you always get the best rate.

So, whether you’re looking for some in stock car lease deals or you’re after some of the finest Tesla lease deals on the market, we can help!