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Leasing a car - the truth behind company cars

A company car is a vehicle that is provided to employees of a business. There can be a number of different reasons why a company car is required, but most firms use them because they are a necessity in order for the employee to complete his or her job as efficiently as possible. Many top-level company employees, such as managers and executives, may be given a company car as a bonus.

Having a company car means that the driver will be able to use the vehicle without having the responsibility for its upkeep. Most companies will also pay for the insurance, general maintenance and repair costs.

The benefits of having a company car

There can be many different perks to having a company car, especially for people that are in a position to purchase a vehicle. Many companies provide their employees with fuel benefits, meaning that they pay for a certain amount of fuel. If this fuel benefit goes over a predetermined limit then the employee will have to pay for it if they want to continue using the vehicle.

The biggest single benefit of having a company car is that the driver does not have to take out a large loan or be tied down to a contract in order to have access to a car. This can save a huge amount of money over a period of time, especially in interest charges. There is also no need to worry about loan fees, general maintenance costs or repair bills.

As company cars are usually provided via leasing agreements, they can be exchanged for new models at the end of the agreed contract period; usually between two and four years. This means that the general wear and tear is kept to a minimum and that depreciation does not become a real concern.

Company cars and tax

Company car owners no longer have to pay tax based on the amount of business miles that are being driven; instead, the tax is based on the car's carbon dioxide emission levels. This can be an advantage for small businesses, as they can opt to use hybrid cars, electric cars and smaller vehicles. However, it could negatively affect a company that requires larger vehicles that are not as ecologically friendly. Anyone interested in getting a company car should always choose their vehicle wisely in accordance with the emission levels and tax band that will be required. HMRC normally updates these tax bands on a yearly basis.

Lease a company car with Lookers

For further information on leasing a company car (10 vehicles or more), or to view our current selection of cars available, contact Lookers Leasing. Alternatively if you are a small business looking to lease under 10 vehicles, contact our Lookers Contract Hire team instead, who can walk you through the process and offer you competitive deals.