Key highlights
- Company cars can be financed several ways
- Chattel mortgage, hire purchase and lease options
- Employee private use brings extra considerations
- One broker compares company car structures across 80+ lenders
A company car, whether driven by a director or provided to an employee, can be financed in several ways. The right option depends on how the car will be used and how you want to handle ownership and repayments. Here is an overview.
What are the company car finance structures?
The main options for a company car include a chattel mortgage, where the company owns the vehicle from the start and the lender holds security until the loan is repaid, and a commercial hire purchase or lease, which handle ownership and end-of-term differently. A chattel mortgage is often chosen where the company wants the asset on its books immediately, while a lease may suit businesses that update vehicles regularly.
How is employee car use treated?
When a company car is made available to an employee, additional considerations can arise, particularly around how any private use is treated. Clear records of business versus private use help both the finance arrangement and the company's tax position. Because these matters can involve fringe benefits and other rules, they are best planned with your accountant or registered tax adviser rather than assumed.
Which company car option suits your business?
Choosing between the structures comes down to whether you value outright ownership, predictable repayments or the flexibility to change vehicles. The deposit you can contribute and whether a balloon payment suits your cash flow also feed into the decision. Comparing the structures side by side against your actual figures is the clearest way to land on the right fit.
How do you compare company car options?
Overdrive Business Vehicle Finance can compare company car structures across a panel of more than 80 lenders through one broker, Simon Kendrick, so you can weigh them properly. Ask for an obligation-free quote to begin. The initial check is a soft enquiry that does not affect your credit score, with no obligation to proceed.
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