With changes in the UK (mainly taxation) business contract hire is on a noticeable decline. Indeed our own statistics demonstrate an evident move from company cars to car allowances coupled with a move away from purchase style products like PCP and HP. However, this is not to say that a company and/or fleet is a thing of the past; there are still good reasons for companies to offer company cars to drivers and for businesses to operate a fleet.
The important point to note is that we have an unsettled and changing automotive landscape which is trying to achieve some consistency in a fluid economic period. With the government making knee-jerk policies on diesel vehicle, WLTP, electric vehicles and company cars, we can all be forgiven for a lack of clarity.
Leasing a Range Rover Sport, or similar high-net vehicles, is still perfectly permissible for any business (sole trader/partnership/limited company or PLC). However, before you consider this, you do need to understand that contract hire is a credit based product for both individuals and businesses.
What this means is that a business needs to consider, often with assistance from their accountant, as to whether or not they are in a financial position to lease the vehicle.
All businesses need to produce some form of accounts; for a limited company these will be filed annually at Companies House. Most finance companies we work with will expect at least 2 years’ accounts to be filed in order to make a thorough assessment. As part of this they will consider the trading history, net worth, industry worked in and the directors involved in the business. Additionally, some finance companies now ask for the home address for those shareholders who own 25% or more of the business. The more vehicles a company requires/the more expensive a car is, the more in-depth the assessment will be by an underwriter.
There is not automatic entitlement to lease a car for a business!
So what happens if you don’t meet the criteria for a lease vehicle? This will ultimately depend on the issue being presented to the finance company. For example, if a company has not yet filed accounts at Companies House or there are one set of accounts which are not particularly strong, the company will be classed as a “new starter”. Some finance companies will still consider offering a credit facility to the customer, based on certain conditions:
One vehicle only – unlikely to procure more than one vehicle until further accounts filed;
£25k max capital lend – the value of the total rentals payable cannot exceed this/restrictions on vehicle value;
DG’s – a guarantee from a director (directors) will be required. This is a personal undertaking from the director to say that they will pay if the company defaults; and
Enhanced initial rental – the company will need to make a high initial rental, often between 6 and 9 spread. The finance company expects to receive a sizeable upfront capital commitment.
There are other conditions which will be considered as part of the assessment. In an era of KYC and TCF, finance companies are looking more closely at a company, particularly when they are looking for luxury vehicles. One of the main points to note, is that while the company is being underwritten, the credit history and profile of the directors is also considered.
To be clear, when you submit an application for a business contract hire vehicle, the directors’ credit files will be reviewed.
In most cases, these are “soft searches” which do not leave a footprint on the credit file. However, in doing so they will consider the attitude and approach to finance of a director; if you cannot look after personal finance then this will affect your ability to procure a car. If you are asked to provide a personal guarantee/director guarantee, a “hard search” will be undertaken and this will leave a footprint on the credit file.
When you are asked to provide an application for credit, personal details of the directors are requested and this is why.
Can smaller subsidiaries/foreign companies lease a car in the UK? Again, we can consider most situations which are presented to us, so long as we get the correct information. Some parent companies operate smaller (and loss-leading) companies who may need vehicles. On their own, the application would be declined as the credit profile/accounts would be unsupportive. However, cross-company guarantees can sometimes be considered. In the same way, a foreign company (one being outside of the UK) may also want to lease a company car. Depending on where the company is based, and the information we have, there are routes forward. In some cases, the finance company will have a presence in the country of the foreign company and they can perform some form of underwrite.
Depending on the condition of the parent company, the finance company maybe be able to offer a credit facility based on guarantees. With customers who are essentially French, German and Croatian, we have tried and tested methods for getting these arrangements organised.
In terms of the car shown here, the Range Rover Sport Diesel Estate 3.0 SDV6 HSE Dynamic 5dr Auto, this is based on the following configuration:
· Santorini Black Metallic Paint
· Perforated windsor Leather – Ivory
· Morzine Ivory Headlining
· Colourway – Ebony/Ivory
· Trim – Grand Black Veneer Finisher
· 22″ 5 split spoke silver finish alloy wheels – style 5004
· Park pack – Range Rover Sport
· Privacy glass (to rear of B post)
· Fixed Side Steps (Dealer Fitted)
As standard the car includes Windsor leather upholstery, Meridian 380W audio system, 4-way lumbar support, lane departure warning system, climate control ,alloy spare wheel, cruise control, 60/0 split folding seats, 21” alloys, front parking aid with visual display, heated front and rear seats, matrix LED headlight, 16-way electrically adjustable driver and passenger seats, ambient interior lighting, front and rear carpet mats, heated washer jets, rain sensing wipers, auto locking differential, CBC, DSC, electronic traction control, hill descent control, low traction launch, trailer stability assist, adaptive brake dynamics, terrain response, Bluetooth, InControl Secure, rear parking distance control, electric gesture tailgate, mist sensor, push button sensor, navigation pro system with 10” touch screen, pro services, auto dimming rear view mirror, electric heated, adjustable and folding door mirrors with memory, DAB radio, HJSE badge, illuminated aluminium tread plates, adaptive brake lights, automatic headlights, LED rear lights, climate control memory, multifunction steering wheel, sports pedals, extended leather pack, InControl connect pack, keyless entry, immobiliser and perimetric and volumetric anti-theft alarm. In terms of additional specification, consider adding – privacy glass, sliding panoramic roof with sunblind and the contrast roof (in Narvik Black).
In terms of the technical-side, company car and business users can note the P11d at £71,835.00 and CO2 at 202g/km. The 2993CC 8 speed auto engine delivers 36.7combined MPG, 306ps and 0-62 times of 6.8 seconds. Service intervals are set at every 12 months or 16,000 miles. As such, consider driver-maintained vs funder-maintained arrangements.
Find the webs best leasing deals on the Range Rover Sport @CarLease UK – you can also check out more executive vehicle reviews below…