How To Choose The Right Company Car For You
Business leasing is one of the most popular options for employees and employers to get themselves a brand new car for low monthly payments. Once you’ve decided that leasing your next car is for you, the fun begins and you get to pick which car you’re going to get! While it is exciting picking your next car, it can be overwhelming with millions of company car lease deals available and different car makes and models to choose from.
When you’re getting yourself a new company car, you want to make sure you pick the right one. So we’ve put together this guide to help you with key considerations and some of the most popular lease company cars.
Key Considerations When Choosing A Company Car
Budget
First and foremost, you need to have a think about what your budget is for a new company car. We’re confident that at LeaseLoco, there is a deal for everyone’s budget, whether you are looking for cars under £200 /month, or if you’re looking for a 7 seater SUV for under £400 /month. You may want to have a think about your budget for your car and any additional packages, including maintenance and servicing.
Fuel type & mileage
You may also want to consider what fuel type would be best for you, which can depend on the running costs of each, the mileage you will do, whether you do a lot of city driving etc. You should check a car’s fuel consumption and insurance costs in addition to the monthly payments you will need to pay.
The mileage you do will also be a key consideration as this will affect your monthly price for the car, and will meant that if you pick a suitable mileage you won’t need to pay excess miles at the end, or fall so far under your mileage that you could have saved money by opting for a lower mileage.
For diesel vehicles, you will need to pay a higher BIK tax rate than other fuel types which can be costly. That said, if you do enough miles, then the fuel savings may outweigh the additional tax amount for a diesel car.
Electric car BIK rates
An electric car business lease deal can be a significant cost saving due to the company car tax rates. At the moment, if you have a company car, you will need to pay a tax called Benefit in Kind tax, as it is a benefit on top of your annual salary. However, the government introduced new tax rules so that any electric vehicles did not have to pay any of this tax for 2020/21 and only 1% in 2021/22, meaning a potential huge saving for going green.
What you will use the car for
You will need a car that matches your lifestyle and plans, considering things like:
- Will my whole family fit in the car?
- Do I have off-street parking for an electric wallbox charger?
- What type of roads will I be mostly driving on?
- Will I be doing a lot of city driving or long distances?
You will want to consider all aspects of your life and what you will be using the car for. We want to make your search as easy as possible, so on our search page you can filter down on the car body styles, seat numbers, mileage and more to find something that suits you best.
Any spec preferences
Another thing to consider is what features of the car are important for you to have whether it be parking sensors, heated seats, built-in sat nav, tinted glass etc. From this, you have a couple of options to consider. You can either get a trim level that includes the features you are looking for, or you can opt for a factory order and add on any optional extras such as these, and compare the costs of both and see which offers the best value.
Best & Most Popular Company Cars 2022
One of the biggest considerations is the company car tax you will need to pay, which is why opting for a company car with low or now tax can be cost effective. We have compiled a list of the top company cars to lease for you to give you an idea of some of the better options to choose.
Volkswagen ID.3
The Volkswagen ID.3 is a great all-electric option for a company with low BIK tax, meaning a financially attractive option. It’s quite spacious inside and can be fun to drive too. You’ll find that it is significantly cheaper than a Tesla Model 3, but offers a similar range with certain battery options. For example, the cheapest Model 3 only offers 254 miles range, however the ID.3’s 77kWh model offers 341 miles! So this car is an affordable option with a pretty good range.
Volvo XC40
The XC40’s electric and hybrid models (Recharge) have also made our list, being a roomy stylish SUV. If you’re heading on long journeys, the XC40 can be a really comfortable drive. The 216bhp T5 PHEV is one of the most popular options, offering a 13% BIK rate in 2021/22 and has 28 miles of electric range.
BMW 3 Series 330e
The BMW 330e is a go-to for many executive company car drivers, being comfy and fun to drive. While the petrol and diesel BMW 3 Series BIK rates can be up to 37%, the 300e is only at 11%, meaning an obvious choice for those looking for an executive saloon. You will also be able to cover up to 37 miles on fully electric power and still have the car’s rear-wheel drive or optional four-wheel drive on the road.
Tesla Model 3
The Tesla Model 3 has had a lot of attention in the past couple of years and has gained numerous awards. We’re not surprised considering the Long Range trim can do 0-62mph in just 4s, has a 360 miles range, seats 5 people and you will be paying almost nothing in tax for it.
Mercedes-Benz A Class A250e
The Mercedes A Class has always been a popular choice in the UK with its previous efficient petrol and diesel engines. However, now that Mercedes has spun this into a PHEV offering, it is a great company car option. It is a smaller than a few of the other options mentioned here, but is still a stylish drive. The A250e offers up to 45 miles of pure electric range and a low BIK rate of just 6% compared to it’s diesel version of 34% BIK, making a great saving for business leasing.
KIA e-Niro
This electric SUV has one of the best ranges, making it a great company car choice with a low BIK tax rate. It can travel up to 282 miles with its battery and also offers an incredible 451 litre boot capacity, making it a really spacious interior. You’ll find that the hybrid version of the KIA e-Niro will have cheaper monthly payments to lease, but the fully electric aspect means you’ll pay far less in tax than you would with the hybrids.
There are plenty excellent choices for a company car, but we think these are some of the best options to choose from. Luckily, the filters on LeaseLoco’s search page make it really easy to find a car that is suitable for you and meets all of your needs.
You may need to take a bit of time and think about all the key considerations for getting a new company car lease. You could save a significant amount on tax by opting for an electric car, but is the car’s range long enough for your needs?
If you’re really unsure about what company car you want to go for, you can always try and narrow down your choices to 2 or 3 options and head to your local manufacturer’s dealership and take them for a test drive to see what you think and what your heart jumps to!
FAQs
Can you choose any car as a company car?
This will depend on your company. Every business may have different options or potential limitations for your company car, meaning you may not be able to pick the exact model you like. This is why a company car allowance may be a better option if picking the exact car is important to you.
Does my company car count as income?
A company car is considered to be a non-cash benefit for an employee, so it does not count as income. Similar benefits include accommodation, mileage allowances and subscriptions. However, as it is a non-cash benefit, you will need to pay tax on it if your employer lets you use it for personal use as well as business use (Benefit in Kind tax).
Should I accept a company car?
A company car can be an incredible benefit to have as you’re not personally tied into a financial contract and your employer is responsible for all of the driving costs. So it can be great for those who drive a lot of miles. However, if you picking the exact spec and trim is important to you, it may be a better option to have car allowance as you will be more likely to get the vehicle you want this way.
Is a company car a good perk?
A company car can be a pretty good perk to have. Your employer is responsible for all of the driving costs, so there is less for you to worry about, although you will need to pay tax for this benefit. So, it is certainly worth considering cars that have a low BIK rate to keep this cost down low.