If you’re new to leasing, then it may be confusing to understand the difference between personal car leasing (Personal Contract Hire) and business car leasing (Business Contract Hire). Luckily, both options still see the great benefits of leasing with fixed low monthly payments, no depreciation worries, and you get to drive a brand new car (or van) every few years!
Whether you’re looking for a new car or van, we have plenty of lease deals to choose from.
What's The Difference Between Personal & Business Leasing
Personal and business leasing are quite similar, so to help you understand which option is for you, we go over the main differences.
The name on the lease
The name you use on the agreement is the first difference. If you take out a personal car lease then the agreement will be under your own name. However, for a business lease, it will be the company’s name on all the paperwork.
The documents
The documents that you provide for each are different as the documents for business leasing should all relate directly to your company. This will include business bank statements, the company address, registration number and other specific company details to be approved by the finance company. With personal leasing, on the other hand, you will need to provide your ID, proof of address and other personal documents. With both options, the funder will require a credit check before approving any lease deal.
The tax benefits
Business leasing is VAT recoverable, so you can claim 100% of the VAT back if the vehicle is solely used for business use, or 50% if the car is used for both business and personal use. Personal car leasing will include VAT in all of the monthly payments, so the cost of business leasing can be significantly cheaper. This is one of the biggest benefits of business car leasing, and there is no denying that the low monthly rentals are a great way to drive a brand new vehicle for a minimal expense.
Leasing With LeaseLoco
Personal and business leasing are very similar, and the process of leasing is the same. There are just a few differences with setting up the deal and the costs. Either way, you will lease a vehicle for a set amount of time through fixed monthly payments and will return the vehicle at the end of the contract. If you want to read more about business leasing, we have a handy page that covers what business leasing is, its eligibility and benefits.
At LeaseLoco, we compare the hottest business and personal deals on the market from high-quality leasing companies. With thousands of options, we’re confident that you’ll find a lease deal that suits your needs.
Looking for a van? We’ve got you covered with our available business van lease deals too!
FAQs
Should I do personal or business lease?
Ultimately, the decision comes down to you and your circumstances. With personal leasing, you will need to pass the appropriate checks, including credit checks. This is the same for business leasing but instead of looking at your private history, they will look at your business.
If you are in a position to take out a business lease, you will see cost savings through the tax benefits, which can be a great help for cash flow in the business by paying a fixed monthly rate without the need for a large upfront payment.
Is it better to lease a car for business?
There are a lot of benefits to leasing a car for a business as opposed to buying. If you’re involved in a business, you are probably pretty busy. Leasing a car will save you a lot of time and hassle as you won’t need to sell your car when you want a new one – all you do is hand it back and get another lease deal! With a leased vehicle, you don’t have a depreciating asset on your books, unlike you would if you bought a car, which can often make your accounts look better to investors. By having a fixed monthly payment, it is much easier to manage cash flow, freeing up your money to spend elsewhere.
How does business leasing a car work?
The process is very similar to personal leasing. To start your search you can view all the available business car lease deals where you can compare the hottest deals on the market. Once you’ve found a deal you like the look of, we’ve made it really easy to contact our leasing partners from the deal page by clicking ‘call’ or ‘message’ and they will be able to talk you through your options and help you secure a deal.
The process may be slightly different between leasing companies, but the standard practice is that once you have discussed and confirmed a quote, you will complete an application; undergo the appropriate checks; potentially pay a one-off broker fee to secure the deal; organise the delivery of your brand new car. There will also be a final finance agreement to sign, but after this, you just sit back and wait for your car to be delivered for free to your doorstep.
Is business leasing cheaper than personal?
Business car leasing tends to be cheaper than personal because personal car lease deals always include VAT within their cost, while business lease deals can claim some (or all) of this VAT back. If you opt for a maintenance package too on your business lease, you can also claim back VAT on this cost.