Business car finance, otherwise known as business contract hire, is a car lease in the business’ name. Instead of being tied to a person, the lease contract is with the company. It allows you to spread the cost of a vehicle over fixed monthly payments, then when the term ends, you hand the vehicle back.
Who is eligible for business car finance?
A limited company, sole trader, partnership or LLP are all eligible for a business lease, providing they’ve been trading for two or more years.
Can I use a car for business and personal use?
Yes, you can use your vehicle for both business and personal use; however, if you’re VAT registered, you’ll only be able to claim up to 50% of the VAT back from your monthly payments, and you’ll also be subject to company car tax.
What are the benefits of business car finance?
Low, fixed monthly payments, no commitment to owning a depreciating asset, tax savings and driving a vehicle you may not otherwise be able to afford are all benefits of business car finance.
How long does my business have to run to get car finance?
For your business to be accepted for car finance, it must have been established and running for at least two years. This gives the lenders proof that your business is profitable and secure and, therefore, less of a risk when lending money to you.
Can a business claim VAT on car finance payments?
Yes, a business can claim up to 100% of the VAT on its vehicle’s monthly payments, providing the business is VAT registered and the vehicle isn’t used for personal journeys. If it’s split for business and personal, a business can only claim up to 50% of the VAT.
What’s the shortest finance agreement I can take for a business vehicle?
The shortest business lease we offer is a 12-month agreement; however, we may offer a shorter lease depending on the vehicle.
Do you supply business fleets?
Yes, we provide cars and vans for business fleets. If you’re looking for a collection of different vehicles, we can help. While the cars may be part of a fleet, we treat them as individual vehicles throughout the process, so you’re always guaranteed quality.
Do you offer discounts on fleet vehicles?
Usually, manufacturers will only provide a discount if you order more than five vehicles at one time.
Can I get car finance if I’m self-employed/sole trader?
Yes, if you’re self-employed or a sole trader, you can get car finance. Before accepting you, the lender will often ask for at least two years’ of accounts.
I’m self-employed/sole trader with bad credit. Can I apply for a car loan?
Yes, we work with lenders who specialise in helping those with bad credit. We can’t guarantee you’ll be accepted, but we always guarantee to consider every circumstance.
What documentation do I need to provide if I’m self-employed/sole trader?
You’ll need to provide your tax return if you’re self-employed or a sole trader. You also may be asked to provide up to two years of accounts.
What are the tax/VAT benefits of business finance?
If the vehicle is for business use only, you can claim up to 100% of the VAT back on your monthly payments - providing you/your company is VAT registered. The same goes for maintenance packages. You can also note any excess mileage charges at the end of your agreement down as a business expense. If the vehicle is used for both business and personal journeys, you can claim up to 50% of the VAT back from your monthly payments.