There are many advantages to leasing. Whether you’re wanting to bring down your monthly payments, need a car that is still covered by the manufacturer’s warranty period or you just like the idea of having a new car every few years. If you are currently looking for a car lease then you’ll notice that you have a choice between business and personal leasing. They are fundamentally similar, but there are important differences – including the price.
When selecting the lease that is best for you, there are a range of different factors to consider. Firstly, whether the vehicle in question would be involved in business use. Applying for finance as a limited company, partnership, sole trader or LLP can also determine the most relevant leasing contract for you.
Here’s the full breakdown of the differences.
What is a business lease?
If you’re looking for a lease on a vehicle that would be used in business, or if you’re applying for finance as a VAT registered, limited company, partnership, sole trader or LLP, then a business lease could be what you’re looking for.
A business lease (or often called a Business Contract Hire) is simply a contract deal that’s used for company cars. Like with a personal lease, you will need to pay a down payment before the lease starts, and the length of the contract can range from a year to five years. A VAT registered company can lease cars for a few years with fixed monthly payments, and the cars may be used by employees for personal use as well as business use.
One of the main benefits of business car leases is that the annual mileage limit is quite often higher than a personal lease. This is normally because company cars tend to be subjected to lots of motorway miles. On average, the maximum is 40,000 miles a year but it will depend on who you lease from and the business lease deals that they offer. Occasionally some exclusive offers are available for business customers only, based on your eligibility for business leasing.
How does business car leasing work?
When deciding on a business car leasing contract, you will need to consider which vehicle you’d like to lease. From there you will agree to an initial rental and annual mileage amount and, of course, how long you want to lease the car for. Once your lease contract has ended (depending on the type of contract taken out), the vehicle is returned to the finance provider, so you don’t need to worry about depreciation and disposal of the car.
To apply for business leasing, you would need to supply the following information:
– Company details such as business name, address, annual turnover etc.
– Director details such as name, date of birth and marital status.
– VAT returns or utility bills (if the business has been trading for less than two years)
– Three months’ recent bank statements and relevant bank details
– Company accounts (if the business has been trading for less than two years)
– Copy of Director’s driving licence or company accountant’s details. This normally only applies to high-value vehicles.
Some of the benefits of business leasing include:
– VAT can be claimed back on business leasing
– You can reclaim up to 100 percent on commercial vehicles against tax
What is a personal lease?
A Personal Contract Hire or Personal Lease is very similar to a business lease but is for vehicles used for personal use. you’ll still pay an initial payment and then a fixed monthly payment for two or three years, depending on the deal. Personal leases are a popular choice for those wanting hassle-free motoring without owning an asset that is destined to continuously lose value.
To apply for personal leasing, you would need to supply the following information:
– Personal details, such as marital status and number of dependants.
– Employment details for the past three years.
– Your bank details for the account you want to use for your direct debit, should your application be accepted.
– Address details for the past five years.
– Your monthly income and expenditure.
The benefits of a personal car lease include:
– Fixed monthly rentals
– Road tax included
– Maintenance options are available
– No depreciation to worry about
– No disposal issues
– Flexible terms
Interested in leasing a vehicle from Cars2Buy?
To hear more about cars2buy’s leasing comparison service or to view the makes and models available, contact the team today!