Every successful business requires multiple vehicles to get around, as cabs and other local means waste a lot of valuable time. One of the best ways to get to meetings and other work-related tasks done on time is by renting a car through your business.
Though it is a common solution for major companies, one of the primary disadvantages to this is that the car contract would name the company as the owner of the vehicle, not the individual.
One of the first questions that come to mind when renting a car is can I rent a car through my business? The answer to this question is yes, you can rent a car through your company, it is a great way to offset against profits, for one thing, and can also help with the vehicle’s insurance coverage. Keep reading this article to find out the best ways to rent a car through your business.
Yes, you can rent a car through your business and it is often the preferred way for most businesses as the advantages outweigh the disadvantages.
Renting a Car Through your Business
Business owners often find it difficult to choose between buying a company car and leasing/renting one for their company.
Renting a car through your business is usually referred to as car leasing or contract hire. This means that you lease a car for a fixed term, usually two to three years, and pay for it every month. This agreement can be reached through the company and on an individual basis, too.
You or the company do not own the rented car; hence, at the end of the term, you can either renew the lease for the same amount of time or return the vehicle, undamaged and in good condition.
However, if you do not require a car for your company all the time then hiring it occasionally, for a business trip or a holiday could work well instead.
Advantages of Renting A Car Through Your Business
The decision to lease a car through your business is usually a smart one for multiple reasons. Some of them are:
- Availability of corporate rates or better deals for business users.
- The tax you have to pay on these rental cars is less than personal car tax.
- If you decide to rent vans or pick-ups through your business, you pay a fixed car-tax rate.
- There is no risk of depreciation. Over time with constant use, vehicles typically lose 60% of their value, however, by renting a car; that risk is taken up by the car rental agency.
- You can change cars regularly, benefiting from improved standards and safety.
Can I Hire a Car Through My Limited Company?
You can hire a car through your limited company or individually but you cannot avoid company car tax. The greatest advantages is offsetting your VAT liability on car payments.
How to Lease a Car through Your Business?
The process of leasing a car through your business is relatively straightforward but there are a few steps involved to make the progression smooth.
The first step is to consider all of your business needs and what you require from a vehicle.
- After choosing your desired vehicle, you fill out a form with official details and draft the intricacies of the payment.
- Make sure to bring all your business documents along with you to the dealership to demonstrate your credit rating. The dealership will also require your finances and a recent balance sheet to ensure the safety of their vehicle and your ability to make lease payments on time.
- The dealership will ask you to make the payment to secure the vehicle and you will be allotted a registration number.
- When all the documents are signed and a payment method is set up, you are ready to take the rented car with you.
Be sure to choose a car dealership that works with commercial customers. These dealerships provide the best deals for business owners and it’s a much easier process.
Dealerships that specialise in commercial car leasing know more about the demands of their clients and can better help you in choosing a mutually beneficial rental agreement.
How Can I Get a Car Through My Business?
Renting a car through your business is very similar to renting a car in your name. The only noteworthy difference is that through renting a car for your business, you name the company as the owner of your chosen vehicle, not yourself. This means that the rental documents will be signed under the company name, even if you have control of the car.
Is Renting a Car a Business Expense?
Once you rent a car through your business, the monthly payments that the lease requires can be defined as a business expense. This allows you to claim a percentage of VAT, depending on the rate of the business and the level of personal use gained from the rented vehicle.
If you are a business owner looking to lease a car through your business, look no further! RAM Automotive is one of the biggest car rental agencies in the UK and deals with commercial customers. We provide you with the best deals and vehicles that cater perfectly to your business needs. We make sure that both our clients and our business reach a mutually beneficial agreement. Contact us at http://ramautomotive.co.uk/ for booking and more details.