Advantages of Leasing Vehicles Over Purchasing

Introduction: The UK Leasing Revolution

The UK’s vehicle leasing market, valued at £51.4 billion in 2023 (BVRLA), has transformed how consumers and businesses access cars. With leasing penetration hitting 38% for businesses and 21% for private users (SMMT), brands like TeslaBMW, and Kia now dominate leasing portfolios.

This guide explores the advantages of leasing across 40+ manufacturers available through iCarLease.

Financial Flexibility: Lower Costs Across Brands

Leasing spreads costs without large upfront payments, making premium brands accessible:

  • Luxury Models: Lease a Porsche Taycan for £899/month (iCarLease) vs. £1,300+ monthly loan payments.
  • Commercial Vehicles: A Ford Transit Custom starts at £299/month + VAT, freeing capital for SMEs (BVRLA Case Study).
  • EV Affordability: The BYD Atto 3 leases at £349/month, 30% cheaper than financing (Auto Trader, 2023).

Case Study: A London tech startup leased 10 Tesla Model Y EVs via iCarLease, saving £72,000 annually vs. purchasing (Fleet News, 2023).

Tax Efficiency: Savings Compliant with HMRC

Leasing unlocks UK-specific fiscal advantages:

a) Corporation Tax Relief

Businesses deduct 100% of lease payments (HMRC BIM46825). Leasing a Volkswagen ID.4 at £499/month reduces taxable profits by £5,988/year.

b) VAT Reclaim & BIK Rates

  • Commercial Vehicles: Reclaim 100% VAT on vans (e.g., Vauxhall Vivaro) used exclusively for business.
  • Salary Sacrifice: Employees leasing a Kia EV6 pay a 2% BIK rate (2023/24), saving £1,440/year for higher-rate taxpayers.

Expert Insight: “Leasing EVs like the Hyundai Ioniq 5 is a tax-efficient pathway to net-zero,” notes Gerry Keaney, BVRLA CEO.

Access to Cutting-Edge Technology

Leasing mitigates obsolescence risks across brands:

a) Electric Vehicles

  • Tesla Model 3: Includes Autopilot and access to Tesla Supercharger networks.
  • Polestar 2: Leased via iCarLease with an 8-year battery warranty and free Ohme Home Charger installation.

b) Connectivity & Safety

  • BMW i4: Features Live Cockpit Professional with real-time traffic updates.
  • Lexus NX Plug-In Hybrid: Includes Lexus Safety System+ 3.0 as standard.

Mitigating Depreciation Risks

The UK’s volatile used market makes leasing prudent:

  • Luxury Cars: A Mercedes-Benz EQS loses 35% value in Year 1 (CAP HPI 2023).
  • Mass-Market Models: The Toyota Corolla retains 60% value after 3 years, lowering lease costs.

EV Hedge: The MG4 Electric retains 55% residual value (Autorola), reducing lessor risk.

Flexibility for Drivers

iCarLease offers tailored terms for 40+ brands:

  • Contract Lengths: 24-48 months (e.g., Volvo XC40 Recharge aligns with 3-year warranty).
  • Mileage Packages: 5,000–30,000 miles/year; excess fees capped at 10p/mile for Peugeot 208 leases.
  • Early Termination: Upgrade mid-term to models like the 2024 Renault Mégane E-Tech under FCA guidelines.

Simplified Maintenance & Compliance

Full-service leases comprise:

  • Manufacturer ServicingAudi Q4 e-tron plans follow Block Exemption Regulation (BER).
  • ULEZ/CAZ Compliance: All VolkswagenFord, and Vauxhall leases meet Euro 6 standards.
  • MOT Management: Automated via RAC Leasing Assist for brands like Nissan and Honda.

Case Study: A Birmingham NHS Trust leased 15 Skoda Enyaq IV SUVs, avoiding £9,300/year in ULEZ fees (BVRLA).

Supporting Sustainability Goals

Leasing accelerates the UK’s 2035 net-zero target:

  • ZEV Mandate Compliance: Lease Kia EV9 or Genesis GV60 fleets to meet 22% of 2024 EV sales quotas.
  • Carbon Credits: Firms leasing Volvo XC90 Recharge hybrids qualify for Climate Change Agreement (CCA) rebates.

Case Studies: Multi-Brand Leasing Success

a) Corporate: Royal Mail Fleet

Leased 500 Ford E-Transit vans via iCarLease, cutting fuel costs by 40% and claiming First-Year Allowances (FYA).

b) Consumer: Family Mobility

A Surrey family leased a Toyota RAV4 Plug-In for £399/month, saving £2,100/year vs. PCP (Auto Trader).

Future Trends: Emerging Brands & Models

  • INEOS Grenadier: Available for pre-order at £699/month.
  • GWM ORA Funky Cat: Leased via iCarLease with a 5-year warranty.

So, Why Should I Lease? - It’s a Business Savvy Strategic Choice

Leasing through iCarLease offers unmatched flexibility, tax efficiency, and access to innovation across 40+ brands. From Dacia Sandero's affordability to Porsche Taycan's performance, leasing aligns with HMRC policies, BVRLA standards, and the UK’s green transition.

As Mike Hawes (SMMT CEO) states: “Leasing is the engine of Britain’s automotive future.”

To Find Out More… 

Contact an iCarLease Specialist on 0114 2574290
.

Businesses deduct 100% of lease payments (HMRC BIM46825). EVs like the Tesla Model Y have 2% BIK rates.

Yes. The Kia EV6 leases from £469/month via iCarLease, including the OZEV grant.

Leasing costs £499/month vs. £650+ for loans, with no depreciation risk (CAP HPI).

Full-service plans for Audi Q4 e-tron include servicing, MOTs, and roadside assistance.

Excess fees are capped (e.g., 7p/mile for Ford Focus), and you can adjust them. Terms are mid-lease with iCarLease.

Yes. The Porsche Taycan starts at £899/month with inclusive maintenance.

All iCarLease vehicles (e.g., Vauxhall CorsaVolvo XC40) meet Euro 6/CAZ rules.

Choose 24-month-48-month contracts and 5,000-30,000 miles/year for vans like Ford Transit.

Yes. iCarLease's “Early Upgrade” option lets you switch to the 2024 Nissan Ariya.

Employees pay 2% BIK, saving £1,440/year vs. petrol models (40% taxpayer).

Yes. Lease at £249/month vs. £320 for loans, with 60% residual value (CAP HPI).

Yes. Business leases start at £299/month + VAT, with 100% VAT reclaim.

Return, upgrade to a Tesla Model 3 Highland, or buy at a fixed residual value.

Yes. The MG4 retains 55% residual value and includes an 8-year battery warranty.

Leasing EVs like Volkswagen ID.3 helps firms meet 22% of 024 EV quotas.

Yes. The Defender 110 leases from £699/month.

Follow BVRLA Fair Wear & Tear guidelines. Optional packages reduce liability.

iCarLease considers applications holistically; larger deposits may help.

Yes. Includes OZEV-funded Ohme Pro charger installation.

Pre-order the 2024 Renault Mégane E-Tech or Jeep Avenger via iCarLease.

Looking to lease your next car? Contact iCarLease