How Does Business Car Leasing Work?

For businesses of all shapes and sizes, access to vehicles is often essential – but owning a company fleet outright can be expensive, time-consuming, and inefficient. That’s where business vehicle leasing comes in.

Whether you’re a growing start-up or a nationwide enterprise, leasing gives your business access to the latest cars – including fully electric vehicles – without the large upfront costs or long-term depreciation risks.

What Is Business Car Leasing?

Business car leasing is a way for companies to access vehicles without owning them outright. Instead of purchasing a car (and tying up capital), you rent it over a fixed term – usually 2 to 4 years – paying a monthly fee. At the end of the contract, the vehicle is returned, and you can start a new lease if needed.

It’s essentially long-term vehicle hire, designed to reduce financial risk and provide flexibility.

How Does It Work in Practice?

Here’s a step-by-step look at a typical business leasing process:

1. Choose a Vehicle

With EZOO, you’ll have access to a wide range of EVs to suit different business needs. When supplying from our own fleet, we can often get vehicles out to businesses in as little as 7 days.

2. Sign a Business Lease Agreement

You enter into a lease contract – often referred to as Business Contract Hire (BCH). This outlines the vehicle, term, mileage allowance, and monthly cost.

With EZOO, lease terms are flexible – starting from just 3 months (the shortest in the UK), making it ideal if you’re trialling EVs for your team or simply waiting for a new car to be delivered.

3. Make Monthly Payments

Your company pays a fixed monthly fee for the use of the vehicle. With EZOO, road tax (VED) and maintenance are included in this fee.

4. Return the Vehicle at the End of the Lease

Once the term ends, you return the car (provided it’s in fair condition and within the mileage limit). You can then lease a new vehicle, extend the lease, or walk away.

5. No Worries About Depreciation or Selling

Since you don’t own the car, you don’t need to worry about its resale value – making cash flow and planning much easier.

Types of Business Leasing

There are a few variations of business leasing in the UK:

• Business Contract Hire (BCH): The most common option. You lease the vehicle for a fixed term with fixed monthly payments. Great for VAT-registered businesses and low-risk budgeting.
• Finance Lease: You pay a monthly cost and a balloon payment at the end, and the vehicle is sold to a third party. More suitable for businesses that want some control over resale.
• Business Car Subscription: A more flexible, all-inclusive option. Pay monthly with no long-term tie-in – includes maintenance, insurance, and more.
• Electric Car Salary Sacrifice: Technically not a business lease, but worth including. Employers lease the car and employees drive it through a tax-efficient salary deduction.

Why Lease Instead of Buy?

Leasing offers several business advantages over purchasing:

• Preserve Cash Flow: No large upfront payments – capital can be used elsewhere in the business.
• Predictable Costs: Fixed monthly fees simplify budgeting.
• Tax Efficiency: Lease payments can often be claimed as a business expense.
• VAT Benefits: If you’re VAT-registered, you can reclaim up to 100% of the VAT on a commercial lease (and 50% on personal use vehicles).
• No Depreciation Risk: Avoid the hassle of selling a depreciating asset.
• Access to the Latest EVs: Refresh your fleet every few years, with cutting-edge electric vehicles and safety tech.

Why Are Electric Vehicles So Popular To Lease?

With the shift towards net zero and tighter emissions rules, more businesses are switching to electric vehicle leasing. It’s a smart move – and leasing EVs often makes more sense than owning them outright. Here’s why:

• Lower Benefit-in-Kind (BiK) tax: Just 3% in 2025/26, compared to 16–37% for petrol/diesel vehicles. Please note that the BiK for EVs will continue to increase annually until at least 2029.
• Cheaper running costs: Electricity is cheaper than fuel, and EVs have fewer moving parts to maintain.
• Sustainability credentials: Improve your ESG ratings and reduce your company’s carbon footprint.
• Flexible EV subscriptions and salary sacrifice options: With EZOO, you can access EVs in ways that suit modern, agile businesses.

Are There Any Risks or Downsides?

Leasing is low-risk, but there are a few things to consider:

• Mileage limits: Exceeding them can lead to excess mileage charges.
• Wear and tear: You’ll be expected to return vehicles in fair condition.
• Early termination fees: If you end a lease early, there may be a penalty.
• VAT complexity: If vehicles are used for both business and personal travel, VAT recovery rules apply.

Choosing the right partner (like EZOO) can help you manage these issues effectively – with tailored guidance and flexible terms.

How EZOO Does It Differently

EZOO’s approach to business EV leasing is designed for modern businesses:

• Electric and hybrid vehicles: Focused on the vehicles of the future, not the past
• Flexible plans: From long-term leasing to short-term 3-month subscriptions (the shortest in the UK!)
• All-inclusive monthly price: Covering insurance, servicing, 24/7 breakdown cover, road tax, and maintenance.
• Low admin: We manage the setup, paperwork and onboarding
• Employee-friendly: Salary sacrifice schemes that save money and attract talent

Whether you’re looking to electrify your fleet or roll out a low-emission perk for your team, EZOO gives you the tools, cars and support to do it seamlessly.

Lease Your Fleet Today

Business car leasing is a smart, cost-effective way to run a company fleet – especially as more organisations go electric. It allows businesses to access the latest vehicles without the capital outlay or risks of ownership, while unlocking tax advantages and predictable costs.

From traditional business leases to all-in EV subscriptions and salary sacrifice schemes, there’s never been a better time to rethink how your business uses vehicles. With the right partner, leasing isn’t just a finance option – it’s a strategy for sustainability, flexibility, and growth.

Frequently Asked Questions