What is the Difference Between Personal and Business Car Leasing?

Business Contract Hire

A Business lease is also called Business Contract Hireis a contract deal used for company cars. If you are looking to apply for finance on a vehicle that must be involved in any type of business use, then Business Lease could be best option for you. A VAT registered company can lease cars for years with fixed payments. The cars are used by the employees of the VAT registered company for personal use and business use. Payment must be paid before the lease starts and the length of the lease can range from year to five years. Business lease cars have higher mileage because they are used a lot for business purpose. The company has to pay an excess mileage charges if they cover more than the maximum millage. The company have to pay any type of damage charges; they are responsible for any type of damage to the car. Sometimes companies pass these charges onto the employees who drive these cars.

Must Read: Is It Better To Put More Or Less Down On A Car Lease?

Benefits of Business Lease Cars

1. VAT are claimed back on business leasing
2. You have to pay fixed monthly rentals. You discuss and decide a fixed monthly rent of a car.

What do you need to Qualify for Business Lease?

1. You have to provide details of the company. You have to provide the name, address and company registration number
2. You have to provide details of the company director. You have to tell the name and date of birth of the company director
3. You have to provide business bank details such as account number and sort code
4. You should provide additional information. You need a director’s guarantee and bank statements

Personal Contract Hire

Personal Lease also known as personal Contract Hire is similar to business lease. Personal Contract Hire is a contract in which you have to pay an initial payment and then a fixed monthly payment for two or more than two years. These cars are only for personal use of employees. The vehicles are mostly used for private journeys. You can’t use them for business purpose. Just like Business lease you decide a mileage cap for each year and you are charged if you exceed the millage and damage the car.

Benefits of Personal Lease Cars

1. You have to pay fixed monthly rent of a car. You discuss and decide a fixed monthly rent of a car.
2. Maintenance options are also available.
3. You don’t have to face disposal issues
4. You don’t have to worry about Depreciation

Which is cheaper Business Lease or Personal Lease?

According to car leasing special offers UK business lease are much cheaper as compared to personal lease. Business lease are cheaper because you can claim 50 percent of VAT back on the monthly payment. The price of the personal lease always includes VAT.

What to Choose Business Contract Hire or Personal Contract Hire?

Choosing between PCH and BCH could be difficult for you but you should keep in mind about your status. If you are self-employed then personal lease is best for you but if you are working for a company, then you should choose business lease.