Your Business Car Finance Guide
- Krish Appiah
- Jun 9, 2023
- 3 min read
Updated: Jan 29
Empower your business with our cash-flow friendly finance options, enabling you to acquire the necessary vehicles for your operations.
Business car finance is a type of Asset Finance that operates similarly to personal car financing, with the key advantage of being able to finance multiple cars simultaneously. This allows you to distribute the cost over different timeframes, aligning with your business requirements, rather than having to make a lump sum payment upfront.
Table of Contents
Understanding Business Car Finance?
Business car finance involves securing funds to purchase or lease vehicles for business purposes. This can range from a single company car to an entire fleet. Various finance options are available, each with its own benefits and considerations. Approved Finance Group specialises in helping businesses navigate these options to find the best fit.
Types of Business Car Finance
Hire Purchase (HP)
How it works: You pay an initial deposit, followed by fixed monthly payments. Once all payments are made, ownership of the vehicle is transferred to your business.
Benefits: Straightforward ownership process, no mileage restrictions, and the vehicle becomes a business asset.
Considerations: Higher monthly payments compared to some other options, and the vehicle is an asset, affecting your balance sheet.
Finance Lease
How it works: You lease the vehicle for an agreed period, making regular payments. At the end of the term, you can either continue leasing, return the vehicle, or sell it and keep a percentage of the sale proceeds.
Benefits: Lower initial costs, potential tax benefits, and flexible end-of-lease options.
Considerations: You never own the vehicle outright, and there may be mileage and wear-and-tear restrictions.
Contract Hire (Operational Leasing)
How it works: Similar to finance leasing, but typically with maintenance and servicing included in the contract. At the end of the lease, you return the vehicle without any ownership options.
Benefits: Fixed monthly costs, maintenance included, and no depreciation risk.
Considerations: No ownership at the end of the lease, and possible penalties for excess mileage or damage.
Business Loan
How it works: You take out a loan specifically for purchasing vehicles. The business owns the vehicle outright from the start, and you repay the loan over a set term.
Benefits: Immediate ownership, no mileage limits, and the vehicle is a business asset.
Considerations: The business must manage the depreciation and resale value, and the loan impacts your credit.
Key Considerations for Choosing Business Car Finance
When selecting the right finance option for your business vehicles, consider the following:
Budget: Assess your business's financial health and budget to determine how much you can afford in terms of monthly payments and initial deposits.
Vehicle Usage: Consider how often and extensively the vehicle will be used. High-mileage vehicles might benefit from ownership models like HP, while lower-mileage use could align better with leasing options.
Tax Implications: Different finance options have varying tax benefits and liabilities. Consult with a financial advisor to understand the tax implications for your business.
Flexibility: Evaluate the flexibility of each finance option regarding end-of-term choices, mileage restrictions, and maintenance responsibilities.
Asset Management: Decide whether you prefer the vehicle to be a business asset or if you want to avoid the responsibilities of ownership and depreciation.
Why Choose Approved Finance Group?
Approved Finance Group is dedicated to providing tailored finance solutions that meet the unique needs of your business. Here’s why we stand out:
Expert Guidance: Our team of finance experts will work with you to understand your business requirements and recommend the best finance options.
Wide Range of Options: We offer a comprehensive range of finance solutions, ensuring you find the perfect fit for your business needs.
Competitive Rates: We strive to secure the most competitive rates, helping you maximise your budget and invest in other areas of your business.
Exceptional Service: From initial consultation to finalising your finance agreement, we provide exceptional customer service and support.
Conclusion
Securing the right business car finance is crucial to the efficiency and success of your operations. Approved Finance Group is here to help you navigate the complexities of business car finance, offering expert guidance and tailored solutions. Whether you’re expanding your fleet or upgrading a single vehicle, we are committed to providing the best finance options for your business needs.
Contact Approved Finance Group today to explore your business car finance options and drive your business forward with confidence.
