If you’ve ever looked at car rental deals, you may have been tempted to tap the virtual switch to see the difference in cost between personal and business rental cars. Business car rentals are usually a bit cheaper by the month and overall. So how does a business car rental work, who is a business car rental suitable for and what can you get? car company on a business lease to save money? Read to find out.
What is car rental business?
A business lease is similar to a private lease, but it is available to sole traders, limited businesses, limited partnerships, and Limited Liability Partnerships (LLPs), along with limited partnerships. with charities. A business must be in business, demonstrate adequate profit margins, and provide a credit check in order to be able to rent a car. This type of agreement allows the company to rent a vehicle with fixed monthly payments, and the vehicle can often be used for both business and personal purposes. It can be a good way to ensure employees are driving new cars, which strengthen the company’s image and provide the latest in safety, technology and fuel economy.
The initial payment required at the start of the lease, usually expressed as a multiple of the monthly payment, and tends to be three, six, or nine times the normal payment amount. For example, if the agreed-upon contract is described as ‘6 + 35’, the arrangement will require an initial payment of six months upfront, followed by 35 installments of a fixed monthly payment amount. month.
These transactions are sometimes called Business Leases (BCH) and the business or business owner never owns the vehicle, they are essentially renting it out for the long term. At the end of the deal, the car is simply handed over and as long as it’s in good condition, that’s it. However, it’s important to note that if the vehicle is damaged or improperly maintained, this may result in additional fees, depending on the fine print of the contract.
At the start of a business lease, a maximum vehicle mileage is also specified, along with fees to be paid by the valet if the mileage limit is exceeded. These fees may even be passed on to employees if they are deemed responsible for the extra mileage.
Mileage limits for business rental cars are generally much higher than for personal rental cars, which, taking into account the typical use profile of company cars, are more likely to charge a lot more miles. freeway.
Can you save money on business car rental?
If the business rents a car that is only used for business purposes, up to 100% of VAT can be recovered. If the vehicle is used for mixed business and personal trips, up to 50% compensation can be claimed. The same ratios apply to maintenance, fuel and mileage costs. This can lead to significant savings of up to 20% on a comparable privately rented car.
What is a business lease agreement?
If you want your business to pay for the value of owning one or more vehicles, rather than essentially renting them out, buying a business lease is another option. This works in a very similar way to Buy Personal Contracts (PCPs)This is the most popular method of buying a car in the UK for private buyers.
A deposit is required, followed by a fixed number of monthly payments, usually over 24, 36 or even 48 months. At the end of this period, the business can pay a bubble payment to buy the car outright, or choose to move into a new vehicle, using equity as a margin.
The balloon payment is calculated based on the value of the vehicle at the end of the lease and, like business leases, there may be additional costs if the vehicle is damaged or the mileage is exceeded. agreement before re-delivery.
