The three main business car finance products
Business HP — company owns the car at the end. Interest is a deductible business expense.
Business PCP — same three-way exit as personal PCP.
Business Contract Hire (BCH) — long-term lease. No ownership option. VAT reclaimable on lease payments for cars used mostly for business.
The tax angle in one paragraph
For company cars used for private commuting, a Benefit-in-Kind (BiK) tax applies based on the car's list price and CO2 emissions. Electric and hybrid cars attract sharply lower BiK — which is why company EV take-up has doubled since 2023. Always model total cost including BiK, not just monthly finance.
What lenders want to see
Latest set of filed accounts, 3 months of business bank statements, and a personal guarantee from the director (nearly always required for small/medium limited companies). Trading history under 2 years may need a small deposit.
Personal vs company: which is better?
Ask your accountant. As a rough guide: EVs and low-emission cars usually make sense on the company; petrol cars with any private use often work out better financed personally. There's no universal answer.
