If you’re looking for a new car for your business, you may be wondering what route you should take to actually get one. There are a number of options, but one you’ll definitely want to consider is leasing or buying through your actual company. When you lease or buy a car using your business rather than personal details, it opens up numerous benefits. Here you’ll find out everything you need to know about the benefits of buying/leasing a car through your company.
Tax Saving Benefits
One of the main reasons many businesses choose to lease or buy a car through their company is the additional tax savings it provides. However, it is worth noting that those who benefit the most are businesses which are VAT registered. If you are VAT registered, you’ll receive half the lease cost back. If you’re buying the car on the other hand, even if you are VAT registered, if the car will be partially used for personal reasons, it won’t bring any benefits.
For the biggest tax savings, it’s worth ensuring the car is only used for business. If it is, you and your employees will avoid having to pay company car tax. This tax is charged based upon the value of the car, its fuel emissions and what type of fuel it uses. The eco-friendlier the car is, the less tax you’ll have to pay. Cars used solely for business and not for any type of personal use, whether that just be to drive it to and from work, are exempt from company car tax.
If you run a large fleet, you could also benefit from employee car ownership schemes. So, you could save a lot of money if you lease or buy the car solely for business. However, if you’re planning on using the car for personal use too, you will want to look into whether it actually would add up to much savings over leasing/buying a car personally.
If you go through a reliable company like Main and Stones Ltd, you’ll be able to work out exactly how much the car you’re interested in will cost you. They provide full details of the CO2 value, p11d value and a full breakdown of all costs associated with the model.
As well as the tax saving benefits, there are a few other advantages that come from leasing out a company car. These include:
- You won’t need to find a buyer when you want a new car
- You can opt for a car you otherwise wouldn’t be able to afford
- Road fund license is typically included for the first year, if not the life of the hire agreement.
By far one of the best things about business car hire is the fact you can choose a car you wouldn’t be able to afford outright. This gives you the chance to invest in a top quality, stylish up-market vehicle that will do wonders for your brand image. The fact the road fund license is included for the first year also saves you further money. Repayments are usually quite low each month, but of course that depends upon the car you hire.
Business car leasing is also ideal for those who like to change their car every 3-5 years. Once the hire agreement is up, you can simply trade it in for a newer model. It’s quick, simple and gives you variety and something to look forward to every few years.
Overall, buying or leasing a car through your business is a great idea. You will often get much cheaper rates than you would if hiring via a personal account. Just remember, you may need to be able to provide solid accounts for your business to prove your income before you’re accepted.