However, the car will end up costing you more than if you had bought it outright.Īnd you don’t end up owning it, so there is no resale value for you. And lease payments are usually classed as a business expense for tax purposes, reducing the net cost of your lease. It reduces your initial costs and helps your cash flow. Leasing also lets you spread the payments over a longer period of time. Leasing a vehicle might be better if you have limited cash or if you want to change your car every few years. In 2018 there were 1.9 million corporate cars on UK roads and 619,925 light goods vans put through company leasing arrangements.

For example, a start-up delivery company needing several vans may not have the capital to purchase the vehicles outright.Īccording to industry association the BVRLA, leasing accounts for one in eight cars and one in five of all vans on Britain’s roads. Leasing is popular among businesses of all sizes who rely on vehicles, whether that’s a single van or an entire fleet. Or you can swap your car after an average of three years for a brand-new one. At the end of the lease period you won’t own the vehicle but may have the opportunity to extend the lease agreement or start a new one. With leasing, you make fixed monthly payments. Many businesses choose to lease equipment, vehicles and tools for their business, as it can be a more cost-effective alternative to buying outright, especially when you are starting up. Most of us are pretty familiar with buying a new car outright, but leasing is still unfamiliar territory to some, despite its growth in Britain. Leasing versus buying a company car is a vexed question for small business owners. So, given that you’ve jumped through all the hoops of setting up your limited business, wouldn’t it make more sense to lease your motor car?

Should i lease or buy a car calculator