SKODA Business Leasing FAQs – Your Questions Answered
Thinking about leasing a new SKODA through your business? Whether you're a limited company, sole trader or partnership, we've answered some of the questions our business leasing customers most frequently ask us at Lightcliffe SKODA in Warrington.
Our Business Contract Hire (BCH) agreements are provided through SKODA Finance, part of Volkswagen Financial Services. View our latest SKODA business leasing offers.
1. What is SKODA Business Contract Hire (BCH)?
Business Contract Hire is a straightforward way for your business to drive a brand-new SKODA for an agreed monthly rental, without having to purchase the vehicle.
You choose your preferred model, contract length, annual mileage and initial rental. At the end of the agreement, you simply return the vehicle, subject to its condition, mileage and contract terms.
One of the biggest advantages is that your business doesn't have to worry about selling the vehicle or what its future resale value might be.
2. Who qualifies for SKODA Business Contract Hire?
Business Contract Hire is available to limited companies, sole traders and partnerships, subject to approval by SKODA Finance.
You don't need to operate a large fleet or employ lots of staff. We regularly help businesses looking for just one vehicle, as well as those replacing or expanding their existing company fleet.
3. What are the benefits of leasing a SKODA through my business?
Leasing allows your business to enjoy a brand-new vehicle with predictable monthly payments, without committing substantial capital to purchasing a car.
You'll benefit from a full manufacturer's warranty, road tax included throughout the agreement and the flexibility to choose a contract that suits your business requirements.
There may also be VAT and tax advantages, depending on your circumstances.
4. Is Business Contract Hire cheaper than buying a company car?
Business Contract Hire can be a very cost-effective way of running a brand-new company vehicle, particularly when compared to traditional funding methods like PCP or HP.
Leasing generally requires less money upfront than buying outright, provides predictable monthly costs and removes the uncertainty surrounding the vehicle's future resale value.
However, the most economical option will depend on your business's circumstances, mileage and intended period of use.
5. Is VAT included in the advertised monthly rentals?
Business Contract Hire prices are normally advertised excluding VAT, unlike Personal Contract Hire prices, which include VAT.
VAT is added to your initial rental and subsequent monthly rentals.
If your business is VAT-registered, you may be able to reclaim some or all of that VAT, depending on how the vehicle is used and the applicable HMRC rules.
6. Can my business reclaim VAT on its lease payments?
If your business is VAT-registered, it can generally reclaim 50% of the VAT on the finance rental of a leased car where the vehicle is available for private use.
In certain circumstances, such as qualifying exclusively business-use vehicles, a higher proportion may be recoverable.
VAT on separately identified maintenance charges may also be recoverable under the applicable rules.
We recommend confirming your entitlement with your accountant.
7. Are business lease payments tax-deductible?
Business Contract Hire rentals may be treated as an allowable business expense, potentially reducing your taxable profits.
The amount deductible depends on factors including the vehicle's CO₂ emissions, business use and the type of business.
Your accountant can advise on the tax treatment applicable to your circumstances.
8. How much initial rental will my business need to pay?
You can usually choose an initial rental equivalent to 1, 3, 6, 9 or 12 monthly rentals, or alternatively pay an agreed lump sum.
The higher your initial rental, the lower your subsequent monthly payments. On the SKODA Finance quotations we provide, a higher initial rental also reduces the total amount payable over the agreement.
Your initial rental is normally collected around 10–14 days after delivery, so there's nothing to pay when placing your order.
9. How long can my business lease a SKODA for?
SKODA Business Contract Hire agreements are available from 12 to 48 months across the model range.
We'll happily compare different contract lengths to help you find an option that suits your business's budget and vehicle replacement plans.
10. Can I choose my annual business mileage?
Yes. You choose your annual mileage allowance before your agreement begins, starting at 5,000 miles per year, with higher mileage options available.
If your business mileage changes, SKODA Finance allows mileage amendments once the agreement has been active for at least six months, provided at least six months remain. Any amendment is subject to approval and will change your monthly rental.
Excess mileage charges may apply if you exceed your agreed allowance.
11. What's included in a SKODA business lease?
One of the biggest benefits of leasing a brand-new SKODA is having the full manufacturer's warranty from day one, giving your business additional peace of mind compared with running an older vehicle.
Your agreement also includes road tax throughout the lease and 12 months of SKODA roadside assistance.
Optional servicing and maintenance packages are available at an additional monthly cost.
And unlike many leasing brokers, we don't charge a separate arrangement or administration fee at Lightcliffe SKODA.
12. Can I include servicing, maintenance and tyres?
Yes. You can choose an optional maintenance package to help make your business's motoring costs more predictable.
Depending on the package selected, this can include scheduled servicing, maintenance and qualifying tyre replacement.
Servicing must be carried out in accordance with the manufacturer's requirements, using an approved repairer.
We'll explain what's included in the maintenance quotation so you can decide whether it's worthwhile for your business.
13. Can I lease an electric SKODA through my business?
Absolutely! We offer Business Contract Hire across the electric SKODA range, including the Epiq, Elroq, Enyaq and Peaq.
Electric vehicles can be particularly attractive to businesses thanks to their running costs and potential company car tax advantages.
We can also discuss charging requirements and put you in touch with Ohme if you need assistance arranging a home charger.
14. Will I pay Benefit-in-Kind (BiK) tax on a company car?
If your business provides you with a company car that is available for private use, Benefit-in-Kind tax may apply.
The amount depends on factors including the vehicle's list price, CO₂ emissions, applicable BiK percentage and your personal income tax position.
Fully electric company cars generally benefit from substantially lower BiK percentages than petrol or diesel alternatives, making them an attractive option for many company car drivers.
Your accountant or tax adviser can explain the implications for your circumstances.
15. What happens at the end of my business lease?
At the end of your agreement, you simply return the vehicle to SKODA Finance's appointed collection agent.
The vehicle will be assessed against the applicable fair wear and tear guidelines, and any excess mileage or chargeable damage may result in additional costs.
You don't need to worry about selling the vehicle or negotiating a part-exchange value.
If you're replacing your SKODA with another lease vehicle, we can help coordinate the timing of your new car's arrival with the end of your existing agreement.
16. Can I extend or terminate my business lease early?
SKODA Finance normally allows an eligible agreement to be extended by up to 12 months, subject to its extension terms.
Only one extension is available, so an agreement that's already been extended cannot subsequently be extended again.
Early termination is also possible, although charges will normally apply. We recommend obtaining a personalised early termination quotation from SKODA Finance before making any decision.
17. Are there special leasing offers for existing SKODA Finance business leasing customers?
Yes! Currently, SKODA Finance offers exclusive loyalty campaign pricing for existing Business Contract Hire and Personal Contract Hire customers who are renewing their SKODA Finance leasing agreements.
These offers can provide attractive savings compared with standard leasing rates.
We contact our existing leasing customers up to 12 months before their agreements end, giving them plenty of time to consider their next SKODA and arrange a replacement vehicle.
18. Can my business lease a SKODA from Lightcliffe if we're not based in Warrington?
Absolutely! Although we're based in Warrington, Cheshire, we arrange SKODA Business Contract Hire agreements for customers throughout mainland Britain.
The entire process can be completed remotely, from quoting your selected vehicle and ordering your new SKODA to arranging your finance documents and delivery.
We offer a free driven delivery service to many locations, although some remote destinations may carry an additional charge.
Transported delivery is also available at additional cost.
Whether your business is local to Warrington or based further afield, you'll have a dedicated point of contact throughout the process.
Ready to explore your next company car?
View our latest SKODA Business Contract Hire offers or contact Lightcliffe SKODA in Warrington for a personalised quotation.
Business Contract Hire is subject to status, eligibility and finance approval. Terms, conditions and charges apply. VAT and tax treatment depend on individual circumstances and current rules; seek independent professional advice. Vehicle availability and finance offers may change. Please refer to your individual quotation and agreement for full details.