{"id":179424,"date":"2023-02-02T01:04:19","date_gmt":"2023-02-02T01:04:19","guid":{"rendered":"https:\/\/legalvision.co.uk\/?p=179424"},"modified":"2023-12-22T02:19:30","modified_gmt":"2023-12-22T02:19:30","slug":"vehicle-lease","status":"publish","type":"post","link":"https:\/\/legalvision.co.uk\/commercial-lease-property\/vehicle-lease\/","title":{"rendered":"Should I Lease a Vehicle for My Business?"},"content":{"rendered":"\n

To run your business, you may require a new vehicle, such as a car. If you do not have the business funds to buy a company car upfront, leasing a vehicle for your business may be a suitable alternative. This article will examine key considerations before signing a vehicle lease for your business. <\/span><\/p>\n\n\n\n

What is a Vehicle Lease? <\/span><\/h2>\n\n\n\n

A vehicle lease is an agreement to use a vehicle for a set period for a fee rather than buying it outright. They are also known as a <\/span>business contract hire<\/span><\/a> (BCH) or finance leases. <\/span><\/p>\n\n\n\n

A vehicle lease means that you, as a lessee, make periodic payments (e.g. monthly) to a finance company, the lessor, for a fixed period to use the vehicle during that time. The monthly payment amount will depend on how many miles a year you agree you want to drive the vehicle and will often amount to the total value of the car. Likewise, you will also pay a return on capital to your lessor.<\/span><\/p>\n\n\n\n

Typically, you will need to make an initial payment, like a deposit, when your lease contract begins, between three to nine times your monthly payment. Once the lease period is over, your monthly payments end, and you no longer have use of the vehicle. You will never own the vehicle, including once the lease agreement is over.<\/span><\/p>\n\n\n\n

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You may be able to end your lease agreement earlier than the fixed period, but this will cost you in the form of an <\/span>\u2018early termination\u2019 fee<\/span><\/a> which can be 50% of the payments you would have made had you continued with the agreement. <\/span><\/p>\n<\/div>\n\n\n\n

Key Considerations <\/span><\/h2>\n\n\n\n

To help you decide if leasing a vehicle is right for your business, we explain key considerations of vehicle leasing below.<\/span><\/p>\n\n\n\n

Lease Agreement<\/h3>\n\n\n\n

When leasing a vehicle, you will enter a legally binding agreement. You will sign a contract with the lease provider, lasting anywhere from a few weeks to months, possibly even years. As you commit to the lease car for a specific duration, you must honour the terms of your lease agreement. One of these will be your monthly payments, so it is crucial to be sure you can afford these before you sign the business lease car agreement.<\/p>\n\n\n\n

If you do not honour your legal agreement for the business lease car, such as by not keeping up with monthly payments, there will be repercussions. Breaching your lease may even affect the following:<\/p>\n\n\n\n