Do I have to put down a deposit?

A deposit may not always be required with company car finance. Some financing options offer 0% deposit deals, allowing you to finance the vehicle without an upfront payment. However, these options typically come with higher monthly payments or a higher overall cost. It’s important to carefully consider your budget and financing terms to determine which option works best for your business’s needs.

Are there mileage restrictions?

Some company car finance options come with mileage limits. The specific restrictions can vary depending on the provider and the type of agreement you choose. Exceeding the agreed mileage limit may result in additional charges at the end of the contract so it's important to review the terms carefully. Aim to select a plan that aligns with your business's expected usage to avoid unexpected fees.

Will I own the vehicle at the end of the finance agreement?

Whether you'll own the vehicle at the end of your finance agreement depends on the type of arrangement you choose. With hire purchase or lease purchase agreements, you can own the vehicle outright once the final payment is made. However, lease or contract hire options typically don't transfer ownership at the end of the term; instead, you return the vehicle. Always review the specific terms of your agreement to understand the ownership conditions.

Is there a limit on the value of the vehicle I can finance?

The value of the vehicle you can finance will depend on the lender and the specific terms of the finance agreement. Lenders will consider factors such as your business’s creditworthiness, the vehicle’s intended use, and your ability to repay the loan. For higher-value vehicles, you may be required to provide a larger deposit or meet additional criteria. Lenders might also impose limits based on the type of vehicle being financed (e.g., commercial vehicles vs. luxury cars) and your business's financial standing. Check with your lender to determine the specific conditions that may apply to the vehicle you want to finance.

Will my business have to pass a credit check?

Yes, as with most credit options your business normally has to pass a business credit check and demonstrate that it can afford the finance agreement before any funding is released.

Can I use asset finance to fund my vehicle purchase?

Yes, asset finance can be used to fund the purchase of a vehicle for your business. In this arrangement, the lender will purchase the vehicle on your behalf, and you will repay the cost in agreed-upon instalments. Asset finance allows you to spread the cost of the vehicle over time while retaining its use for business purposes. This can be a flexible option if you want to avoid paying the full upfront cost.

What happens if I miss a repayment?

If you miss a repayment on a business vehicle finance agreement, consequences can vary depending on the lender's terms. You may face: Late payment fees or penalties Damage to your business' credit rating Potential repossession of the vehicle (generally after repeated missed payments) It’s best to contact your lender immediately to discuss possible solutions, such as repayment plans or extensions, to avoid any complications.

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What is business car finance?How company car loans work The different types of finance Electric vehicle loans FAQs

AuthorJoe Phelan

EditorLucinda O'Brien

Last updatedJuly 1st, 2026

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What is business car finance?

Business car finance helps you get the vehicles your business needs without paying the full amount upfront. Instead, you spread the cost over time with manageable monthly payments - making it easier to manage monthly cash flow and invest in growth.

There are a few ways to do this:

Leasing: Pay monthly to use a vehicle for a set period. At the end of the term, you can either hand it back or sometimes choose to buy it.
Loan: Buy the vehicle outright with a business loan and pay it off in instalments.
Flexible plans: Some finance options mix leasing and loan features to give you more choice, depending on what works best for your business.

Whether you’re running one van or building a full fleet - business car finance can make it easier to get the vehicles your business needs.

Business car registrations (2025)^[1]

46,388

How does business vehicle finance work?

There are a few options available when seeking finance for a business vehicle - especially a new one.

You can get finance to buy a wide range of business vehicles, including cars, vans, tractors, buses/coaches and HGVs.

Many manufacturers offer deals directly, including:

Contract hire
Hire purchase
Full-payout leasing

Discounts and 0% finance deals are sometimes available when purchasing new vehicles directly from manufacturers too, so it's worth exploring all available options before making a final decision.

You can go to a bank or other lender, a general car dealer or a specialist leasing firm to pick up a vehicle.

Different types of business vehicle loan

Contract hire

Your business hires a vehicle from the finance company for a set time and pays a fixed amount. Contract hire may come with an agreed mileage limit.

Hire purchase

Your business hires a vehicle and has the option to buy it outright at the end of the term. You normally have to put down a deposit at the start and stay within a mileage limit.

Finance lease

Finance lease lets businesses hire a vehicle for a specific period (rather than outright) and make regular payments towards the cost of the vehicle. This also avoids a huge upfront cost for the business.

Standard business loan

Your business borrows the cash and uses it to buy the vehicle up front, with no mileage restrictions or other conditions.

Pros and cons

Pros

Business vehicle loans can have flexible terms to suit your business, including repayment schedules.

There are some business vehicle loans that allow you to own the vehicle outright once you've paid off the loan. This can then be a valuable long-term asset for your business.

This type of loan can give the chance to own newer vehicles, so a business can have an up-to-date and efficient fleet.

Cons

Your business might need to provide an initial deposit to secure the vehicle loan.

As with all loans, your business will incur interest costs and these can add up.

Vehicles tend to depreciate in value over time. If the loan exceeds the rate of depreciation, the company may owe more on the loan than the vehicle is worth.

“Before securing a business vehicle finance loan, it's essential to assess interest rates and their impact on your cash flow. When managed effectively, these loans can expand your fleet, enhance operational efficiency, and drive greater productivity for your business.”

Joe Phelan

Small business expert

Green loans for electric vehicle finance

If you're planning to upgrade to an electric vehicle, you might find you can access a little more finance than otherwise.

That's because as well as being able to find finance for a new vehicle, you can access green loans too. These are sometimes offered by some providers to businesses.

On top of that, there are government grants and incentives to help further. You can see what support is available near you on the British Business Bank page for SMEs here.

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About the author

Joe Phelan

Joe joined the money.co.uk team in 2024, where he helps small business owners navigate the often confusing world of business finance. His role is to cut through the jargon and create clear, actionable content that empowers entrepreneurs to make confident financial decisions.

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References

1.SMMT: Jan-Sept 2025 business car registration totals