Business car leasing explained: Everything you need to know

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Business car leasing has become central to modern corporate fleet management, giving businesses greater flexibility and a number of other advantages over buying vehicles outright. This article looks at the pros and cons of business car leasing and introduces an increasingly popular alternative: car subscriptions for businesses.

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What is business car leasing?

Business car leasing is a way for businesses to add to their fleet without the burdens of traditional vehicle ownership. It’s a smart move for companies who want to keep capital freed up to invest in other areas of the business, as it replaces the large upfront payment of buying a car with simple, predictable monthly payments. 

Lease contracts typically run for two to five years, giving businesses the ability to change or upgrade vehicles regularly and enjoy the advantages of a new or nearly new fleet – such as the latest safety features, and having a smart image to present to customers or clients. You’ll usually pay an upfront deposit at the start of the lease, often equivalent to 10% of the car’s value or several months of lease payments, though there are some no-deposit lease contracts out there.

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Navigating lease options

There are a number of different lease types available for businesses, one of the most popular being operating leases. These give your business the use of a car as though you were its owner, without committing you to the burdens that come with ownership, such as large financial outlay and concerns over depreciation. This type of lease is typically associated with lower monthly payments, and when the lease comes to an end you can hand the car back or upgrade to a newer model.

Finance leases are another popular option for businesses, as they spread the cost of purchasing the car over a number of years. This alleviates the need to find a large amount to invest upfront, as well as giving you tax benefits, as the monthly payments are eligible for tax relief.

Taking out a business car lease is subject to the same types of checks as a personal car lease, such as credit score checks and lengthy terms and conditions to read carefully before signing. These will usually contain stipulations over how many miles you can do each year, what your obligations are for insuring and maintaining the vehicle and what happens at the end of the lease.

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Advantages beyond ownership

Whichever type of car lease you opt for, your business will have several benefits that you wouldn’t have with traditional ownership. First and foremost is financial fluidity, because it doesn’t require the big upfront capital investment. This, combined with predictable monthly payments, makes for better cashflow and budgeting, as well as freeing up capital for investment in other areas of the business.

Leasing also streamlines fleet management, allowing your business to add to your fleet when operational demands require it – ideal for growing companies. Most leases also have a service and maintenance package option, which can reduce the unexpected expenses and paperwork required of your fleet manager.

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Leasing vs. owning vs. subscription

While business car leasing presents a convenient alternative to buying a car outright, there’s an even better option for businesses looking for complete fleet management flexibility: car subscription. This takes the subscription model you’re familiar with from services such as Netflix and applies it to car ‘usership’, giving you the use of a car on a rolling monthly contract that you can cancel at any time.

This brings a number of benefits over both leasing and ownership. Rather than locking you into a contract for years at a time or leaving you stuck owning a car you may no longer need, and that’s depreciating in value all the time, car subscription lets you scale your fleet up and down effortlessly, whenever your business circumstances require it. You can hand the car back when you no longer need it, or swap to a different model better suited to your needs, all without penalty.

You get the same predictable monthly payments with a subscription as you do with a lease, but it makes for even simpler cashflow and budgeting thanks to the fact that your monthly payments include all the running costs. Unlike a lease or ownership, a car subscription payment includes insurance, maintenance, tax, tyres and breakdown cover, meaning you won’t have to budget extra for any of these. Just fill or charge up the car and you’re ready to hit the road.

Another big advantage of a car subscription over other forms of using a car is that there’s no big financial investment involved. You pay the equivalent of one month’s subscription upfront, but this is fully refundable when you hand the car back, which you can do at any time. 

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Navigating Drive Fuze’s subscription experience

With customised business car subscription plans comprehensive servicing and other running costs included, a Drive Fuze car subscription gives you unparalleled freedom. Taking out a business car subscription with us couldn’t be simpler, and you could be on the road in days with our fast approval process. Browse our car subscription fleet and choose the right car for your business, and then fill in a user-friendly form telling us your personal and business details. 

Our subscription terms can be tailored to your business needs, and all you’ll need to think about once we’ve delivered your car is fuel and charging. We’ll even take care of parking fines for you! To make sure your business car subscription goes smoothly, you’ll always have our dedicated customer support team on hand to help.

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Experience fleet management freedom with business car subscriptions from Drive Fuze

Business car leasing brings a number of strategic benefits to businesses, but the case for Drive Fuze’s car subscription service is even more compelling thanks to the complete flexibility it offers to companies operating in an unpredictable market. 

If you’re looking to streamline your fleet management, choose Drive Fuze as your forward-thinking partner and we’ll help you find the innovative transport solutions you need to stay agile and grow. Browse our cars to get started with your subscription, or call us on 0330 118 0947 for a consultation.

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