Car leasing for new businesses: everything you need to know

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There are many things to think about when setting up a new business, and transport is just one of them. But as a start up, it can take time to find the capital to invest in a vehicle. With lower upfront costs and greater flexibility, car leasing has become an attractive option for new businesses looking to find an efficient solution to their transport needs, and more recently, car subscriptions have emerged as an even more flexible alternative.

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Understanding car leasing for new businesses

Whether for business or personal use, the basic premise of car leasing is the same: you effectively rent a car for a defined period (usually two to five years), and at the end of the contract you hand the car back or upgrade it. This is also known as an operating lease, but there are different types out there, such as finance leases, which result in you owning the car at the end of the contract.

Leasing is popular with new and established businesses alike because it reduces the amount of capital you have to invest upfront. Rather than paying for the car outright, you pay a deposit (usually the equivalent of a few months’ rental payments or 10% of the total value), which frees up cash for investing in other areas of your business.

This is especially important for start-ups, which have limited cash flow that needs to be channelled into getting the business off the ground and growing. The predictable monthly payments that come with leasing make financial planning and budgeting easier, while the fact that they’re deductible expenses means they can be offset against tax.

How to get started with car leasing as a new business

Evaluate your business needs

When you’re setting up a new business, your transport needs will be a key consideration. Work out what you’ll need immediately and what you’ll need as your business grows – how many vehicles, how many miles a month, what type of vehicle(s)? You might be the sole employee at the moment, but what happens when you take on staff? It’s worth writing down your requirements in checklist form so that you can easily assess potential cars against your needs.

Research and compare leasing companies

With your ‘must haves’ jotted down, the next step is to scout out good leasing companies in your area or region that cater to new businesses. Travel a bit further for one with a good reputation if you need to – you can check out their credentials and customer reviews online. To simplify your costs as much as possible, look out for those who can offer comprehensive service packages.

Get the paperwork in place

You’ll need a few bits of paperwork before you can lease a car, so have these ready before you head to a showroom. Getting the right documentation together may be more difficult when you’re a brand-new start-up. You might need to show your company registration, financial statements and credit history, which may be your one if your business is so new that it doesn’t have one. A good credit score will help you gain better lease terms.

Negotiate lease terms

With your checklist in hand, it’s now time to negotiate your lease terms to suit your business. This will typically mean agreeing on your annual mileage and any maintenance packages you want to sign up for, making sure you’re happy with terms and conditions (such as wear and tear policies) and settling on your lease duration. 

Review the lease agreement carefully, paying close attention to any hidden costs, penalties and responsibilities you’re agreeing to. If possible, have a legal professional look over it for you before you sign it.

How Drive Fuze car subscriptions offer a better alternative for new businesses

Business car leasing is a popular option for start-ups, but that could be because they don’t yet know about car subscriptions. Our bespoke, competitively priced subscription packages can be tailored to the needs of your new business, and they give you the ultimate flexibility you need when nothing’s certain. 

With a Drive Fuze car subscription, there are no long-term contracts to sign – you can change cars or cancel at any time, without penalty. That’s ideal in the volatile world of start-ups, as you can easily hand the car back whenever you no longer need it or need to save money. And with cashflow critical, the only upfront payment you’ll make is a month’s subscription fee, which you’ll get back when you return the car.

Even better, our car subscriptions are all-inclusive, with maintenance, tax, insurance, breakdown cover and tyres all covered in the monthly fee. This means budgeting couldn’t be simpler, as all you’ll need to factor in on top of your fixed monthly payment is fuel or charging.

With a great selection of cars to choose from, including eco-friendly hybrid and electric vehicles and compact city cars, Drive Fuze gives your start-up access to new and nearly new cars at an affordable price. That’s good news for your cash flow, but also great for your image – which is all the more important when you’re first establishing and building a reputation for yourself.

Our easy sign-up process and fast approval mean you’ll be on the road in no time, with our top-notch customer support team behind you whenever you need help. They’ll even manage your parking fines for you!

Making an informed decision on car leasing for your new business

Car leasing brings many benefits to businesses of all sizes, but it’s popular with cash-strapped start-ups thanks to the lower upfront costs compared with buying cars outright. For even more flexibility, choose a Drive Fuze business car subscription and you’ll benefit from an all-inclusive package that you can cancel whenever you need to, no questions asked.

As the preferred choice for business car subscriptions in the UK, Drive Fuze gives your business a cost-effective, stress-free solution to your transport needs. Browse our cars to get started with your subscription, or call us on 0330 118 0947.

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