Find & Finance Finance Options
Buying and Financing your Company Vehicle
Our Simple Guide
Choosing the right company vehicle funding option is a crucial decision for any business. Whether you operate a single company car or manage a growing fleet, the way your vehicles are funded can significantly impact cash flow, tax efficiency, balance sheet reporting, and long-term operating costs.
At Find and Finance, we help UK businesses understand their options and select the most suitable business vehicle finance solution, aligned to their commercial objectives.
Speak to an ExpertOutright Purchase of a Company Vehicle
An outright purchase involves paying the full value of the vehicle upfront, giving your business immediate ownership.
Benefits of Outright Purchase
- Full ownership from day one
- No ongoing monthly repayments
- Vehicle recorded as an asset on the balance sheet
- Potential to claim 100% of the vehicle value as a tax deduction in Year 1 (subject to eligibility)
- VAT can usually be reclaimed on the next VAT return, where applicable
Things to Consider
- Significant upfront capital outlay
- Capital tied up in a depreciating asset
- Responsibility for maintenance, administration, and disposal
- Find and Finance helps reduce depreciation risk by sourcing the right vehicle and supporting its condition throughout ownership.
Hire Purchase (HP) for Business Vehicles
Hire Purchase is a popular business car finance option that allows you to spread the cost of a vehicle while retaining ownership.
Benefits of Hire Purchase
- Ownership at the end of the agreement
- Lower initial outlay, often limited to VAT
- Fixed monthly repayments for predictable budgeting
- Vehicle shown as an asset on the balance sheet
- Potential 100% tax deduction in Year 1
- VAT usually reclaimable on the next VAT return
- Interest payments are typically tax deductible
- Full residual value retained at the end of the term
Things to Consider
- Interest costs apply
- Depreciation risk remains with the business
- Administrative responsibility unless fully managed
Finance Lease for Company Vehicles
A finance lease provides funding flexibility without vehicle ownership and is commonly used for fleet vehicles.
Benefits of a Finance Lease
- Flexible initial rental to suit cash flow
- Fixed monthly payments
- VAT charged monthly and reclaimable per period
- Interest is generally tax deductible
- Ability to sell the vehicle at the end of the agreement and retain up to 100% of the proceeds
Things to Consider
- No ownership of the vehicle
- Exposure to depreciation versus the agreed residual value
- Administrative responsibility unless fully managed
- IFRS 16 accounting treatment may apply
Business Contract Hire (BCH)
Business Contract Hire is one of the most widely used fleet finance options for UK businesses seeking cost certainty and flexibility.
Benefits of Business Contract Hire
- No capital tied up in vehicles
- Fixed monthly rentals
- Flexible initial rental (typically one to nine months)
- Optional maintenance packages available
- VAT charged monthly and generally reclaimable (subject to usage)
- Rental costs offset against taxable profits
- Contract terms typically between 12 and 48 months
- Ideal for businesses upgrading or expanding fleets
Things to Consider
- Annual mileage limits apply
- Excess mileage charges may apply
- No ownership or retained value at the end of the contract
- Commitment for the full term
- Charges for damage beyond fair wear and tear
- IFRS 16 considerations may apply
Benefit in Kind (BiK) and Company Cars
Enquire NowBenefit in Kind (BiK) is a tax applied when an employee has private use of a company-provided vehicle. It is calculated as a percentage of the vehicle’s P11D value, with the rate determined by factors such as CO₂ emissions, fuel type, and electric range.
Lower-emission vehicles—particularly electric vehicles—attract significantly lower BiK rates, making them a cost-effective choice for both employers and employees. The taxable amount is added to the employee’s income and taxed at their marginal rate through PAYE.
Commercial vehicles are generally subject to a flat-rate BiK charge. However, recent changes mean some vehicles, such as certain double-cab pickups, may now be treated as passenger cars for tax purposes. Understanding these rules is essential when selecting vehicles for business and employee use.
Choosing the Right Vehicle Funding Option
Speak to an ExpertThe right vehicle funding option depends on how your business operates and what you want to achieve. Ownership-based solutions may suit businesses looking to retain long-term value, while leasing options are often preferred by those seeking predictable costs, flexibility, and minimal risk.
Key considerations include cash flow, tax efficiency, fleet size, mileage, replacement cycles, and exposure to depreciation. For employee vehicles, Benefit in Kind implications should also be factored into the decision.
Find and Finance takes a consultative, fully managed approach—helping you select a funding structure that aligns with your business needs while simplifying administration and controlling costs. Professional advice should always be sought where appropriate, and we can introduce trusted accounting and taxation partners if required.
Speak to Find and Finance
If you’re considering company car finance, fleet funding, or reviewing your current vehicle agreements, our team is here to help.
Contact Find and Finance today to discuss the most suitable funding option for your business.
Enquire Now