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Business car leasing

Whether it's a runaround for a sole trader or a while fleet of company cars your after, business car leasing could be the perfect solution. Find out why.

Andrew Woodhouse

Words by: Andrew Woodhouse

Autotrader

Additional words by: Autotrader

Last updated on 30 October 2026 | 0 min read

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Business car leasing could be a good choice if you want to drive the latest vehicles while benefiting from potential tax advantages. Read on to learn how it works. Business leasing, also called business contract hire (BCH), lets you obtain brand-new vehicles for your business and employees without a large upfront purchase cost. It is available to business owners, sole traders, partnerships and limited companies, whether you need one vehicle or an entire fleet.

How does leasing a business car work?

Business car leasing works much like personal leasing: you pay an initial rental and processing fee, followed by fixed monthly payments. The main difference is that VAT-registered businesses may be able to reclaim VAT on leased vehicles. After choosing a vehicle, decide how long you want to lease it and estimate your annual mileage. You should also choose an initial rental amount you are comfortable paying and allow for the processing fee. Consider whether you need optional extras, such as a maintenance package. Make sure your business can afford the initial rental, processing fee and ongoing monthly payments. If your revenue fluctuates seasonally, remember that the monthly payments will still be due throughout the year. When you are ready, apply for credit online at a convenient time or call our team, available until 8pm on weekdays and from 9am to 6pm at weekends. Depending on your business and how long it has been trading, the leasing company may request additional information during the credit application. Requirements vary by provider and circumstance but may include management accounts or bank statements. The application must be submitted or approved by a statutory director. In some cases, the leasing provider may also carry out a personal credit search on the directors. Once your application is approved, you will pay the processing fee to secure the order and sign an order confirmation form setting out the lease details. We will then arrange the leasing contract for a statutory director to sign and organise delivery of the vehicle. At the end of the lease, you return the vehicle to the leasing provider.

Is business car leasing right for me?

Leasing rather than buying a business car can offer several benefits:

1. Potential tax savings VAT-registered businesses may be able to reclaim some or all of the VAT on leased vehicles and reduce their tax liability. Savings vary by business, so speak to your accountant about the potential benefits for your circumstances.

2. Lower upfront capital requirement Leasing spreads the cost of a brand-new car across the contract term, freeing capital for other business priorities. This can be especially useful for fleets, where buying vehicles outright could require a substantial upfront investment.

3. Predictable monthly costs Fixed monthly payments make costs easier to track and budget for. They include vehicle excise duty and any optional extras, such as a maintenance package. A fixed contract term also makes it clear how long the business will incur the cost.

4. Drive a new car Leasing gives you access to the latest cars without a large upfront purchase. When the contract ends, you can apply for another lease and, once approved, change to a new vehicle every few years.

5. No need to sell the car At the end of the contract, you do not need to sell or dispose of the car. The funder will inspect it for fair wear and tear, after which you can return it and begin looking for your next vehicle.

6. Comprehensive manufacturer’s warranty Because leased vehicles are new, they come with a full manufacturer’s warranty*.

Business leasing also comes with several important considerations:

1. You will not own the car, so you cannot sell or modify it.

2. You must pay an initial rental and processing fee at the start of the lease.

3. Once you sign the agreement, you must make the monthly payments for the full contract term. Ending the lease early may result in an early termination fee.

4. You must look after the vehicle. You may be charged for damage beyond fair wear and tear.

How do I apply for business car leasing?

Visit Car Leasing on Autotrader to browse available deals. If you are leasing for your company, make sure you select business rather than personal offers. Once you have chosen a car or van, select the contract length and estimate the annual mileage. Choose an initial rental amount you are comfortable paying and budget for the processing fee. Decide whether you need optional extras, such as a maintenance package. Check that your business can afford the upfront costs and regular monthly payments. If your income varies seasonally, plan for payments that remain due every month. When you are ready, submit your credit application online or call our team, available until 8pm on weekdays and from 9am to 6pm at weekends.

What happens at the end of a business lease?

Contact us to arrange collection when your business lease ends, as this will not happen automatically on the contract end date. On collection day, the lease provider will inspect the vehicle’s interior and exterior. Normal signs of everyday use are generally covered by fair wear and tear. You may be charged for damage beyond fair wear and tear, so inspect the vehicle before returning it. The provider will not collect a vehicle if its tyres are below the legal minimum tread depth, because it would be unsafe and illegal to drive. Once you return the vehicle, the leasing contract ends. To help keep your business and employees mobile, we can arrange a key-for-key swap so your new vehicle arrives on the same day the old one is collected. Explore our latest business car leasing deals to find a suitable vehicle at a manageable monthly cost.

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