BUSINESS VS PERSONAL LEASE

BUSINESS OR PERSONAL LEASE: WHAT IS BETTER?

Let’s be honest, when it comes to saving money we are ready to spend some time researching the options. Especially if you are a business owner and deal with taxes, profit risks, and responsibility for your staff. When you are in charge of running the business you definetely. consider business vs personal lease deal advantages.

You will try to look for the best way to use your business name and save money to lease vehicles.

And if you think of a consultation, you can always count on our lease experts. They will gladly help you and answer any questions!

Business Lease Vs. Personal Lease

a man opening the newspaper named business

Business lease refers to a contractual agreement for partnerships, LLPs, sole traders, and companies that authorizes the lease of cars for company use. 

The cars may be used by employees for personal use as well as business use. 

You may be required to make a down payment before the lease starts. The initial lease fee depends on the agreed monthly fee.  

The annual mileage limit needed is quite often higher on a business lease than a personal one. It is because company cars tend to be subjected to lots of motorway miles.

Generally, the maximum business mileage is 40,000 miles a year. This can vary on different deals and models. 

If you cover more than the maximum mileage, the company will have to pay an excess mileage charge. Also, the company should cover any damage charges.

Personal lease is quite similar to the business one but the contractual agreement is signed between you and a leasing company. In this contract, you can use the vehicle for private journeys.

You may choose 0 down payment or put some amount of initial payment as a capitalized cost reduction. The mileage restriction, in this case, is different and usually varies from 8 000 to 15 000 miles per year.

As part of either a Personal or Business Contract leasing agreement, the company or individual will need to pass a quick credit check.

We covered a more detailed review of credit issues when leasing in our posts LEASING AND CREDIT SCORE – TIPS AND TRICKS and CAR LEASING WITH BAD CREDIT – HOW TO.

For personal leasing, you need:

For business leasing, you need:

  • Photo ID – e.g. a passport or driving license.
  • Proof of address – e.g. utility bills or bank statements.
  • Bank statements and audited accounts – typically three months’ worth.
  • Proof of address and ID of the main company director.

What’s the catch?

What differs between a Business Contract and a Personal Contract lease is whose name is on the contract, the documents you require, and the tax benefits of what money can be claimed back at the end.

Choosing Business, you are able to deduct either some parts of lease costs or the standard mileage rate. You may check IRS details for more information.

Which is better between a company lease and a personal lease depends entirely on your specific needs. If your business needs several cars, opting for a business lease would be a great idea.

Besides, you will enjoy paying relatively low monthly rentals because of the option of claiming the part of taxes.

Whether for business or personal use, leasing a car is an excellent idea if you are considering a cheaper and hassle-free way to own a car.

And our lease experts are here to assist you in any question and offer the best deal to fit your business or personal driving need.

#enjoy your freedom with Grand Prix Motors!

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