What Is Business Car Leasing?

For companies, renewing your fleet vehicles with a business car lease is the ideal way to finance new cars. They help spread the payments over the months and avoid a single lump sum having to be put through the books.

Bank managers and financial annalists will also view the purchase of vehicles through car leasing arrangements as a positive statement of business longevity. They also make sense as car-leasing deals often include the vehicles maintenance and servicing within the agreement to, so you will be saving money on running costs as well.

The initial payment on a car leasing deal is normally the equivalent of three months payment. Two months as a deposit and the third part as the month’s rental, plus an administration fee of between £100 and £200. At the end of the agreement you can usually carry over the deposit from your first car onto any subsequent vehicle you take a lease out on.

Once you take delivery of your new car, you then have to make, in the case of a one-year contract, nine further payments, or 33 payments if you take the contract over three years. Before finally handing the car back to the dealer.

So what is in the deal for business users?

The monthly payments, along with providing you with a new car will also include full maintenance, routine maintenance and servicing, tyres and exhausts. Many of the larger organisations also provide roadside assistance with the likes of the AA or RAC and annual road tax.

Dealers will quite often provide a dedicated accident manager along with a freephone line for booking appointments and services and a network of courtesy cars and picks to assist business users.

The customising, company livery and installing gadgets such as sat nav, mobile phone kits and tracking systems, along with fuel cards to keep an eye on running costs.

All cars financed under a car leasing scheme need to have fully comprehensive cover and despite being able to get cars at a preferential rate your insurance cost will more than likely be at the full rate. You may need to bear this in mind when deciding what type of vehicle to take out.

It can also be possible to take out a newly new car leasing deal with certain companies. What you need keep in mind here is the type of car you consider. Traditional fleet cars like Mondeo and Vectra loose value early on in the life cycle and so you may be able to get some good deals here.

Higher end cars that hold value, such as BMW, VW or Audi will not depreciate as much during the early years and will not represent that much of a saving over taking delivery of a brand new car. These cars will represent a less appealing option for those considering newly new offers.

Over all though, businesses users that take on cars through leasing deals will find that under current market conditions, this possibly represents the best way to fund your company cars.