Quick Guide to Buying a Car for Your Small Business

28th July 2017

As a small business owner, you will need to buy a car for your business at some point. There are many choices available to you and each choice has its advantages and disadvantages. This guide will give you a quick summary of all these choices and why one choice may be better for you depending on your circumstances.

Business Car leasing

Business car leasing offers a small business owner many advantages and some disadvantages. But overall, it is an extremely favourable method to buy a car for your small business.

Advantages of Business Car leasing

Car leasing agreements cover the total amount of the car factoring in the depreciation of the car over the period of leasing. The factors that are considered are period of lease, miles that will be covered and the type of car bought. Note that the longer the period of the lease, the lower the monthly amount that will need to be paid. Normally car leasing agreements last between 24-48 months.

Disadvantages of Business Car Leasing

On average, you will not use all the mileage agreed upon in your car leasing agreement. But if you do exceed your mileage level you will pay an excess mileage fee. Note that the more miles you use, the more your car will depreciate. But the depreciation of your car will never be more than the value of the car itself. If as a small business you do not have enough money for a deposit, then you will end up paying a larger amount monthly which may put your cash flow at a disadvantage.

Business Contract Hire

Business Contract Hire allows you to buy a car for a certain period and then give it back. This will ensure that you make affordable monthly payments but you will never own the car. Monthly payments are worked out over a period of time after a deposit has been given. Other factors considered in working out the monthly payments that you will pay are: miles that will be covered, period of lease, deposit amount and credit scores.

Business Contract Purchase

The best benefit about a Business Contract Purchase is that you can hand your car back or pay a balloon payment and claim ownership of your car.

FREE BROCHURE DOWNLOAD

Watch our quick introduction Video

FREE Brochure Download

Download our FREE Brochure for Small Businesses

Included in our Brochure:

  • Company Formations
  • Tax & VAT
  • Advantages and Disadvantages
  • Directors & Share Holders
  • Much more..


Privacy Policy

LEARN MORE ...

your money pearl accountants

Your Money

A wealth of information on tax and financial issues

your business pearl accountants

Your Business

Useful information on key issues for businesses

interactive tools pearl accountants

Interactive Tools

Useful calculators and documents

tax strategy pearl accountants

Tax Strategies

Tax planning strategies for all types

Sign up to our Newsletters

Join today and receive various How to Guides. We will also send you all the latest tax news and links to our latest Blog posts.

Privacy Policy

Accountants London
Company Registration No. 07078392