Hybrid Car Leasing for Businesses

Can businesses lease hybrid cars in the UK?

What are the benefits of leasing hybrid cars for businesses?

Leasing hybrid cars offers businesses a practical way to reduce running costs while contributing to environmental sustainability. Hybrid vehicles combine an internal combustion engine with an electric motor, delivering better fuel efficiency, particularly in city driving where stop-start traffic benefits from the electric motor. This reduces fuel expenses, making it a cost-effective choice for businesses with fleets. Additionally, hybrids help businesses reduce their carbon footprint, aligning with corporate social responsibility (CSR) goals. Leasing also allows businesses to access the latest hybrid models without the commitment of ownership, enabling easy upgrades as technology improves.

What are the tax advantages?

Businesses leasing hybrid cars can take advantage of several tax benefits:

  • Benefit-in-Kind (BIK) Rates: Hybrid cars generally attract lower BIK tax rates than petrol or diesel vehicles, especially for plug-in hybrids (PHEVs) with low CO₂ emissions. This reduces the taxable benefit for employees using company cars, making hybrids a cost-effective choice.
  • VAT Reclamation: If the car is used for business purposes, companies can often reclaim up to 50% of the VAT on the lease payments for cars used for both personal and business use and 100% for cars used solely for business.
  • Capital Allowances: Hybrid vehicles with lower emissions may qualify for enhanced capital allowances, allowing businesses to deduct a higher proportion of the lease cost from taxable profits.
  • Congestion Charge Exemptions: In cities with congestion charges, low-emission hybrid cars may qualify for exemptions or reduced rates, further lowering running costs.

How do hybrid cars compare to electric for business fleets?

When comparing hybrid cars to electric vehicles (EVs) for business fleets, each offers distinct advantages:

  • Range and Refuelling: Hybrid cars provide the convenience of longer ranges, thanks to their petrol or diesel engines, while still benefiting from electric driving in short bursts. This eliminates the need to rely on charging infrastructure, making them ideal for businesses with drivers covering long distances or in areas with limited charging stations. Fully electric cars, on the other hand, have lower running costs and zero emissions but require access to charging points, which can be a limitation for some businesses.
  • Running Costs: While electric vehicles have lower energy costs and reduced maintenance due to fewer moving parts, hybrids offer a balance, reducing fuel consumption without the need for constant charging. This can make hybrids more practical for businesses not ready to fully transition to EVs.
  • Environmental Impact: Electric vehicles are the greenest option, producing zero tailpipe emissions. However, hybrids still offer significant environmental benefits over traditional petrol or diesel cars by reducing CO₂ emissions, particularly in urban environments where the electric motor is used more frequently.

For businesses that require flexibility and a bridge between traditional and electric motoring, hybrids offer an excellent solution.

What are the best hybrid cars for business leasing?

The best hybrid cars for business leasing combine efficiency, practicality, and comfort. Top choices include:

  • BMW 330e: A plug-in hybrid that delivers both performance and fuel economy, ideal for executives needing a balance of luxury and efficiency.
  • Volvo XC60 Recharge: A plug-in hybrid SUV offering space, safety, and luxury, making it well-suited for businesses with clients to impress or those needing extra cargo capacity.
  • Ford Kuga PHEV: A practical and versatile plug-in hybrid SUV that provides ample space and efficiency for business use.
  • Lexus UX Hybrid: A compact SUV that combines luxury with hybrid efficiency, offering low emissions and a premium driving experience.
  • Hyundai Ioniq Hybrid: An affordable hybrid option with impressive fuel economy, perfect for businesses looking to reduce costs without sacrificing reliability.

These models offer a combination of performance, efficiency, and practicality, making them ideal for businesses looking to upgrade their fleet with hybrid vehicles.