What is the difference between a short-term business lease and a short-term personal lease?

The two main types of short-term car leases available in the UK are personal and business, and there are plenty of benefits whether you're searching for a short-term lease for your employee or a personal lease for yourself.

With a leased car, you won't have to worry about surprise costs. Personal and commercial leasing are very similar, and each has its own set of advantages.

Before we compare the two, let's define them…

With a short-term personal lease, you lease a car for a set period of time and then return it at the end of the contract. At the outset of the lease, you'll pay a deposit and work out a payment schedule.

A short-term business lease works in a similar way: you lease a vehicle for a set length of time, make fixed monthly payments and pay interest, and then return it end of the contract. However, short-term business leasing is only available for VAT registered companies. 

Benefits of a short-term business lease

• If you’re looking for a business car lease, you can reclaim up to 100% of VAT on a commercial vehicle.
• To be able to take advantage of tax benefits, you or your employee must exclusively use your car for business purposes.
• A business lease can be cheaper than a personal lease. Once the contract is complete, there’s no need to renew and you are not left with costs or a vehicle you won’t use. 

Benefits of a short-term personal lease

• You may use your vehicle as much and as little as you want, within your annual mileage.
• It allows you to change your vehicle more regularly and test a variety of vehicles.
• If you are choosing a vehicle for yourself, personal short-term leasing is likely to be a better fit if you're a frequent driver who drives for pleasure rather than business.

 If you have any questions, our car experts are on hand to put you at ease and guide you through which short-term lease is right for you. Contact us now to find out more.