Business car leasing – also known as Business Contract Hire (BCH) – enables companies to hire new vehicles for work purposes in the UK.
Firms pay an initial upfront payment that acts as a deposit and thereafter pay a fixed monthly price, with each contract length typically lasting two to four years.
Once the contract has finished, the vehicles are returned. The company can lease new models or walk away.
Businesses have the option to lease a fleet of vehicles, with typical fleet sizes of between three and 10 cars.
Business car leasing works in a similar way to personal car leasing. And the whole process can be done online:
Search for your ideal car. There are multiple ways you can find a car which fits the needs of your business, such as searching for the make/model or by monthly cost
Choose your contract terms. You’ll be able to see the initial rental cost based on how long you want the car for and the number of miles you’ll drive each year
Credit check and delivery. Once your firm has been approved for the lease, you can agree a time, date and location for delivery, which could be your home or business premises
There are two main types of business car leasing options. Check which one applies to you before signing a contract.
The most common type of lease agreement. The finance provider takes on the depreciation cost at the end of the agreed term. Contracts tend to be less flexible, so you’ll need to stick to the annual mileage and ensure that the car is returned in good condition to avoid fees.
A more flexible lease, but your business will be responsible for any depreciation on the car above what would be expected during the term of the lease. This may suit your business if you plan to lease a fleet of cars and can’t afford to be restricted by annual mileage.
When deciding on a business car lease deal, you want a contract that matches your requirements. Factors to consider include:
Decide how much you can afford to pay for a vehicle or fleet of vehicles each month through the company. Weigh it up as a business expense and include any tax incentives.
Select a car or cars that suit your business. It may be the vehicles need plenty of space to transport bulky items, or they’re likely to need to cover a lot of miles so should be as fuel-efficient as possible.
While additional miles on a business lease contract might cost more, it’s important to accurately assess how much the lease vehicle will be used to avoid high extra mileage fees at the end of the term.
MoneySuperMarket’s partners at Moneyshake source deals from a panel of leading lease providers in the UK. Compare and find the most cost-effective deal for your business needs.
At the end of the business car lease contract, the vehicle is usually returned to the finance provider.
Your company can then either choose to walk away or take out a new business car lease contract for new vehicles.
While you won’t be able to purchase a lease car at the end of your agreement, if you really like the car, you can choose to lease the same model or similar on a separate agreement once your contract is up.
On our motoring leasing partner Moneyshake’s website, the most affordable business car leasing deals are:
Dacia Spring: with monthly payments from £113 plus VAT
Vauxhall Corsa: with monthly payments from £139 plus VAT
MG HS: with monthly payments from £183 plus VAT
*Prices accurate as of August 2025
All based on 9 months initial rental, 36 month contracts and 5,000 annual mileage
There are advantages and disadvantages to taking out a business car lease. Here are some things to consider:
Claim back VAT on monthly payments and maintenance if your business is VAT-registered
Payments aren’t shown as a liability/asset on a company’s balance sheet, which can make it easier to receive funding from investors or bank loans
Low benefit-in-kind tax rates are available to employees of a company who use a business lease car. Cars with lower CO2 emissions fall into a cheaper tax band
May lead to disgruntled employees not having the make and model of car they would choose
Company car tax could be high if you’re a high earner or drive an expensive car with high CO2 emissions
You won’t own the vehicle, so if you’re an employee and leave your job, the car will stay with the owner until the end of the contract
We’ve teamed up with our partner Moneyshake to bring you a wide range of great business leasing deals from across the UK market. It makes sense to compare with us because you can...
Searching with us is quick and easy. You can view a wide range of business leasing deals all in one place.
Compare deals based on a car make and model you have in mind or see in-stock vehicles.
Once you’ve chosen your leasing deal you can apply immediately online. You’ll get free delivery of your vehicle.
Business car leasing can be a smart move for firms looking to keep costs predictable while driving reliable vehicles that are fit for the job. Fixed monthly payments make budgeting easier, while tax benefits and VAT savings can reduce the overall expense. It also means less hassle around depreciation or resale value, freeing businesses to focus on growth.
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It’s easy to compare business car leasing deals with MoneySuperMarket. We’ve teamed up with Moneyshake to bring you the best deals on the market from 23 leasing companies.
MoneySuperMarket has teamed up with partner Moneyshake to bring you the best business car leasing deals on the market. Search quickly all in one place online.
Pick the business use option and view vehicles by make and model, your monthly budget or preferred contract term. View in-stock cars if you need the vehicle quickly.
Compare quotes to find the perfect deal for your firm’s needs, with road tax, warranty and vehcile delivery all included in the price.
MoneySuperMarket’s leasing partner, Moneyshake, is a leading UK-based online platform revolutionising how consumers find new cars. It specialises in comparing personal and business car leasing deals, making it straightforward to find competitive offers for both individuals and companies.
By partnering with a wide network of trusted providers, Moneyshake uses innovative technology to simplify your search, ensuring you effortlessly compare the most competitive offers across all makes and models.
It provides transparent, easy-to-understand information, making the process of getting your next vehicle faster, simpler, and more affordable.
Business car leasing payments can be claimed as a tax-deductible expense for corporation tax purposes. The amount of tax which can be claimed against business profits will depend on the CO2 emissions of the car you’re leasing.
Vehicles with CO2 emissions of more than 110g/km aren’t fully tax-deductible, so you’ll only be able to claim for tax relief on percentage of the car lease costs.
You won’t be able to claim capital allowances for a lease car, as these only apply to owners of a vehicle wanting to deduct part of the vehicle’s value from profits before paying tax. In this instance, capital allowances would fall with the finance provider.
Most business lease deals won’t include insurance, so it’s up to you as the finance holder to arrange comprehensive cover for your leased vehicles.
Remember to arrange the insurance policy to begin from the date that the car is delivered. You can ask the leasing provider for the registration number of the vehicle in order to get a more accurate quote too.
You generally follow the same process you would with a collision for a personal vehicle. Business lease providers will generally insist on fully comprehensive car insurance before allowing you to sign for a lease car.
This means that not only will any third party be covered in the case of an accident, but your car is also insured in the event of a collision or other loss. The terms of the insurance should mean it is replaced with a like-for-like vehicle.
Business car leasing is cheaper than personal car leasing because VAT-registered businesses can claim up to 50% of the VAT on the monthly payments. Advertised business contract hire agreements won’t include VAT, whereas personal lease deals include it in the monthly price.
Remember that any personal miles you travel in a business lease car will need to be deducted from your work mileage. They’ll then be subject to the same VAT you’d pay on a personal agreement.
Both new and existing businesses can lease a car providing they have the right documents and pass a credit check to ensure they can afford the monthly payments.
You’ll need details of the business, company director information and business bank details.
Start-up companies with little or no financial history will probably also need some more details to prove that they can make the monthly payments. This will likely include:
Three months of business bank statements and/or audited accounts
Management accounts for your business
A director’s guarantee promising to pay the remaining lease payments if the company defaults on them
The major difference between a personal contract hire and business car leasing is that business contract hire is only available to companies. With a business lease you’re leasing on behalf of the company, whereas with personal lease you’re leasing for personal use.
Another important difference is that with business contract hire, your firm can claim back some, or even all, of the VAT on the lease agreement. So, this can help you make greater savings in comparison to personal car leasing.
Company-car leasing is when you have access to a brand-new car every few years that your company leases for you. A company car allowance on the other hand, is money paid to you, on top of your salary that you can use to buy or maintain a car.
Business car leasing contracts tend to be anything between two and four years. The length of your contract will affect the price of your monthly rental. A longer lease will mean lower fixed monthly payments, although you can end up paying more overall.
Yes, you can lease used cars for business car leasing.
Popular cars for business leasing tend to be well-known, top quality car brands such as Audi, BMW and Tesla.
Other popular brands for business car leasing include Peugeot, Toyota, Nissan, Jaecoo, Skoda, Hyundai, Vauxhall, vehicles in Volkswagen ID range, as well as the Cupra Born and Qashqai electric cars.
Typically, business car leasing providers will charge a rate per mile for excess mileage. The rate varies but can add up if you’re not careful.
Yes, you can get a business car lease as a sole trader. The only exception to getting a business car lease is if you’re a self-employed taxi driver because of the high mileage your vehicle will do.
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Reviewed on 22 Dec 2025 by
