For many sole traders and entrepreneurs, a business lease car is a choice that has been considered. You drive a brand new car without having to pay a lot of money first. The costs are manageable and you benefit from tax advantages. In this article you will read what exactly business leasing is, what types there are and what the advantages and disadvantages are. But we also tell you what to look out for when leasing a business car.
What is business leasing?
Business leasing means you use a car for your business and pay a fixed amount for it every month. So you don't have to buy the car at once. Whether leasing makes you the owner of the car depends on the type of lease. The two most commonly chosen forms are financial lease and operational lease.
For whom is business car leasing interesting?
Business leasing is convenient for the self-employed and entrepreneur who is often on the road for work and does not want to spend a large amount on a car. After all, you know exactly what you are paying each month and you usually have less hassle with it. Even as a starting entrepreneur, you can often already lease, even without complete annual figures (especially with financial leasing).
Advantages of leasing a car
- No big upfront expense: you keep money for other things.
- Same amount every month: That's fine planning in your budget.
- Reclaiming VAT is possible: if you pay VAT as an entrepreneur, you can reclaim this VAT.
- It often includes insurance, maintenance and roadside assistance: especially with operational leases.
- Driving in style: you always drive a neat, modern car that suits your business
Buying a business car can sometimes be more advantageous in the long run. But especially in the beginning, leasing is often easier, clearer and gives peace of mind.
What types of lease are there?
Financial lease: You buy the car in instalments and are the economic owner immediately. The car is on your balance sheet and you arrange things like insurance, maintenance and taxes yourself. At the end of the lease, the car is all yours.
Operational lease: you rent the car from the leasing company. That lease company remains the official owner and takes care of maintenance, insurance and depreciation. At the end, you simply return the car.
Table of differences
| Feature | Financial lease | Operational lease |
| Ownership of car | Yes | No |
| On balance | Yes | No |
| Maintenance & insurance | Take care of it yourself | Included |
| Addition | Yes, for private use | Yes, for private use |
| Car depreciation | Yes | No |
| End of contract | Car is yours | Car turn in |
Costs and concerns
Pay close attention to what is included in the monthly fee. Think about things like insurance, maintenance and how many kilometres you can drive. If you want to terminate the contract early, this can cost a lot of money. Therefore, always compare several providers. And compare not only on price, but also on conditions.
VAT, addition and deductibility
Are you leasing the car on a business basis and liable for VAT? Then you can reclaim the VAT on the lease costs and fuel. Do you drive more than 500 kilometres privately per year with the car? Then you have to deal with addition. In 2025, it will be 22% of the list value, or 17% for electric cars up to €30,000. This amount comes on top of your income and you pay tax on it.
Terms
Leasing companies pay attention to how financially sound your business is and how things are going. With financial leasing, you can often lease without showing annual figures. This is because the car counts as security. With operational leasing, they usually do ask for annual figures and do a BKR check. So always check carefully what exactly a provider wants from you.
Conclusion
Business leasing is an easy way for self-employed people and entrepreneurs to drive a decent car without having to pay a lot of money first. After all, you know exactly what you will spend each month and can often deduct the costs for tax purposes. Think carefully about what you need and how you drive. Also get good advice on which type of lease suits you best. That way, you choose a car and contract that suits your business perfectly. Want to know more? Then read our articles on financial lease and operational lease.
