Oftentimes, drivers will hear the term “business car finance” and assume that it covers different vehicles to the more traditional models. But this would be a misguided point of view to have, because in actual fact, when it comes to the cars themselves, there is a major if not a complete crossover between “normal” car finance plans and those which are business-focused. But what is the difference, then? Let’s find out.
Indeed, the difference between a traditional car finance plan and a business-focused deal is not about the car itself but about its purpose, and about how the payment plan has been set up in the first place. For a typical car finance plan, the driver is solely responsible for taking the car out and about, covering payments and so on. When it comes to a business car finance plan, however, the company is taking ownership of the vehicle for the duration of the plan (assuming it is not a plan that involves merely hiring (personal contract hire – pch) the model, in which case the company will be responsible for it, but the finance provider is still the official proprietor).
Now, one would assume that, in such a case, the business would purchase the car and then allocate it to an employee, but that is another misconception. Generally, it will either be the employee who is considering a car purchase that would approach their company about initiating a deal where it is used merely for business purposes, or the company might suggest to a high-ranking member of staff or an employee that is regularly travelling to promote the organisation’s services that it would be best for all parties if they were to drive a company car. This makes things easier for the driver because, while they are getting to use the vehicle and are of course still paying, the business has entered into the agreement and thus will reduce some of the occasional headaches that can come from buying or looking after the vehicle.
What’s more, because the business would be involved in the deal, this means that there might be a greater range of car options to consider because the company would want the employee to help them to emit a particular image that could require a bigger-name brand of vehicle. Be mindful, though, that if the employee was to leave the company either of their own volition or by order of the company, then they could not bring the car away from the business. However, the organisation would still be covering payments of the vehicle up until the conclusion of the plan. An early exit might be negotiable, but oftentimes the business might then transfer the vehicle to another member of staff replacing the previous employee. The key message is that a business car finance plan can definitely be of benefit to a member of staff, but always remember that the company would have the power, especially if things took an unexpected turn when it comes to being employed by the organisation.
Hopefully, we have provided an insight into the pros and cons of a business car finance plan, but you can learn more by going to our website’s knowledge base and blog area for more topics about car finance options.
As is always the case, when you’re ready for your next purchase, contact our Cheshire based team who will happily assist you with our most attractive finance offers on some of the most sort after car brands, visit the links below:
So, these are just some of the reasons why we are considered a leading car finance specialist, but you can learn more by contacting our vehicle financing team here or if you just want to browse our stock page first, feel free. For an instant No Obligation quote, Apply today or Call us on 01925 230360.