More UK businesses are leasing vehicles

More UK businesses are leasing vehicles

19 December 2019 | Kate Kozlowska | 4 min read

Commercial vehicle lease contracts are increasingly popular in UK

While it was common for many businesses to lease vehicles before, there is a clear trend towards even more businesses choosing this option. There are many factors stimulating this growth, including tax incentives and the growing influence of start-ups on the market. Let’s take a look at some of the numbers behind this trend and reasons why car leases seem so attractive to new businesses.

The Numbers

For the first half of 2019 BVRLA leasing broker statistics show a growth of 12% compared to the first half of 2018. The growth is almost entirely due to growth in personal contract hire (PCH) for cars (+23%) and business contract hire (BCH) for vans +(16%).

The total number of contracts at the end of June 2019 was 338,111, a net increase of 35,699 in the same period last year. The volume of new contracts in the year July 2018 to June 2019 was 115,941, up from 108,218 achieved during 2018 calendar year.

For cars, personal contract hire (PCH) continues to dominate, representing 60% of all car leasing contracts on fleet, whilst business contract hire (BCH) was down from 40% to 36% of cars on fleet.

The number of new van contracts made in the year between July 2018 and June 2019 was 29,269.  This is 1500 greater than the total number of new contracts made during the 2018 calendar year.

Other highlights include:


  • 57% of the BVRLA broker vehicles on contract and 65% of new contracts are PCH. PCH grew by 23% year on year.
  • 38% of the BVRLA broker vehicles on contract are business contract hire, and 33% new contracts are business contract hire. BCH grew by 1% year on year.


  • 64% of the BVRLA broker vehicles on contract and 71% of new contracts are BCH.  BCH grew by 16% year on year.
  • 29% of the BVRLA broker vehicles on contract are finance leases. Finance leases grew by 1% year on year.

The Factors Behind This Trend

Leasing vehicles is always a great option for businesses who are trying to balance their books and forecast expenses. Leasing is also seen as a great option for startup owners as well. As many of these budding businesses are cash poor, leasing allows them to limit monthly expenses and put that money to better use. Then there’s the benefit of having a new or almost new vehicle that will remain under warranty during the duration of the lease for a fraction of the cost. Maintenance cover also gives a stress-free experience, knowing that the vehicle will be looked after if anything goes wrong. This is especially important when you rely on your vehicle for work. Commercial Vehicle Contracts has some great finance lease options on cars and popular vans, with the Renault Kangoo an affordable van of choice, or the Mercedes eVito. Many others opt for the classic Ford Transit, Peugeot Boxer, or the sought-after Citroen Berlingo

The Tax Benefits

Another thing that pushes many businesses to lease instead of buying are the tax benefits.

It’s good for company accounts

On a Business Contract Hire, the vehicle or the fleet of vehicles are not shown as a liability or an asset on the company balance sheet. Instead, the vehicles are “off balance sheet”. This is a huge advantage for businesses as it means you can apply for more credit lines.

You can offset the rental

If you are a limited company, then you can offset the monthly rental against your end of your corporation tax. If you are a sole trader or a partnership, then you can offset the rental against the yearly taxation.

Reclaim VAT

Leasing a car for business means you can reclaim a generous 50% of the VAT paid. When the vehicle is used exclusively for business, for example a van, taxi cab, driving school car or self-drive hire vehicle, you can reclaim 100% of the VAT. 

You can claim back on excess mileage and maintenance agreements

The excess mileage charge is considered a service charge. This means that you can offset 100% of this charge against corporation tax. You can also claim 100% of the VAT back on your VAT return.

Tax Benefits & Implications of Business Leasing

A Few Cautionary Words for Business Owners

While leasing a vehicle can be a great way to free up some cash that can be reinvested, it’s also important that business owners choose the right terms and contract types (find out more about different types of contracts)


Leasing is definitely growing in popularity among financially conscious businesses and customers alike. This in return could have tangible repercussions on new vehicle sales, and the motor industry as a whole. If you're keen to find out more, or get a quote on a commercial car or van, then contact us now.

Am I Eligible?

We work in partnership with many of the UK’s leading van leasing, car leasing, contract hire and finance leasing funding companies in order to provide the most competitive rates and offer you the best leasing deals possible. Our guide to eligibility will help you understand the various requirements for establishing a vehicle finance agreement.

Our Vehicle Ordering Process

Achieving the best van leasing deals and the best car leasing deals has become a key consideration in the work we do, so you can get the best leasing deals. Our process is built to ensure we accurately and efficiently identify your needs and requirements, achieve the best finance deal for you, apply for finance on your behalf and provide you with the quickest delivery possible.

Our First Class Service

At Commercial Vehicle Contracts, we ensure that every aspect of the car leasing process and van leasing process is seamlessly undertaken with full management on your behalf, meaning you can sit back and relax with the peace of mind that your chosen vehicle will arrive at your desired address matching your required needs.

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