Advantages of Leasing Vehicles Over Purchasing
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 companies and 21% for private users (SMMT), brands like Tesla, BMW, 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 maintains 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 Servicing: Audi Q4 e-tron plans follow Block Exemption Regulation (BER).
- ULEZ/CAZ Compliance: All Volkswagen, Ford, 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.”