The complete guide to EV business leasing: Everything you need to know

Electric vehicle leasing for business: Everything fleet owners need to know

The electric revolution is well and truly underway, and the business world is no different.

With nearly two-thirds of businesses planning 100% electric fleets before 2030, this is not a 'fleeting' trend.

In 2024, electric vehicle (EV) registrations increased by 21.4%, with around 64,000 of those registered by businesses and fleets.

But some are still sceptical. And we understand – there's a lot of misinformation out there.

"EVs are too expensive." "The charging infrastructure isn't good enough." "They don't have enough range."

Sound familiar?

If you're nodding along, you're not alone. But these misconceptions stand between you and the significant financial, environmental, and operational benefits EV leasing offers.

Government incentives, tax savings, Benefit in Kind (BiK) rates, and exclusive lease deals have made EV business leasing more accessible and attractive than ever.

That's where Carparison's complete guide comes in. No matter your business size, we'll walk you through leasing EVs, so you get the hard facts.

Buckle in – you'll be in the driver's seat of your new fleet in no time.

What is EV business leasing?

EV business leasing is essentially a long-term rental agreement allowing your business to use an EV for a fixed period (typically two to four years), paid for in monthly payments.

Think of it as a phone contract for cars – you get the latest tech without massive upfront costs or ownership stress.

Instead of buying the EV outright in cash (which would make your accountant wince), your business enters into a lease agreement with a finance company.

Your first payment is the initial rental, which could be anywhere between £0 to the equivalent of 12 months’ payment. This is then followed by monthly payments throughout your lease term, and at the end, you simply hand back the vehicle.

No resale stress, no depreciation worries – just straightforward motoring. Because when you run a business, time is money.

The funder retains ownership throughout the term, handling all depreciation risk while your fleet enjoys brand-new vehicles with the latest tech, safety features, and efficiency improvements.

The difference between business EV leasing and personal EV leasing

While the basic concept of leasing remains, there are some crucial differences that make business leasing very attractive.

First off, tax benefits.

From lower BiK rates and claiming back VAT, to freeing up capital and offsetting against Corporation tax.

Personal lease deals don’t get these tax advantages.

Types of business leases

There are a few different types of business leases to get to grips with first, all serving slightly different needs.

Business Contract Hire (BCH)

First off, your bread and butter, the classic, Business Contract Hire (BCH). This is the most popular option for businesses.

With BCH, you pay a monthly fee for the rental of the vehicle, and once the term of the agreement comes to an end, you simply hand it back. There isn’t an option to extend the term or purchase the vehicle, which keeps things easy and straightforward.

The perfect lease for businesses that want to keep it simple, with no resale worries.

Finance lease

With a finance lease, you make monthly payments throughout the term, but you don't own the vehicle at the end. Instead, you must sell the vehicle to a third party (not back to the finance company). 

Any profit from the sale above the agreed residual value goes to you, but you're also responsible for any shortfall if the vehicle sells for less than expected. This option gives you the potential upside of vehicle appreciation while transferring the risk of depreciation to you.

Contract purchase

This is a combination of leasing and buying – the best of both worlds.

So, like a finance lease, you’ll pay lower monthly payments throughout the term, with a larger final ‘balloon payment’ at the end if you choose to keep the vehicle.

A good method if your end goal is vehicle ownership, but you want to spread the cost.

Unlike a finance lease, there's no requirement to sell to a third party - you simply pay the final amount and the vehicle is yours. This spreads the cost while guaranteeing ownership at the end.

Operating lease

An operating lease is essentially the same as BCH, but can include additional services which is included in your monthly payments, such as maintenance, insurance, and breakdown cover.

All the add-ons wrapped up in a monthly fee, making fleet management a whole lot easier and more predictable.

Hire Purchase

A special shoutout. While not a leasing option, Hire Purchase (HP) is another way to finance your vehicle/s.

You pay monthly instalments towards owning the vehicle, with no final ‘balloon payment’. Once all the payments are complete, you’re now the owner of a lovely new car.

For the majority of businesses, especially those new to EV leasing, Business Contract Hire (BCH) offers the best balance of simplicity, cost-effectiveness, and flexibility.

It allows you to focus on the nitty gritty areas of running a business, and we’ll handle the complexities of vehicle finance and disposal.

Tax benefits and financial advantages

We briefly introduced the tax and financial benefits in the previous section, but let’s get down to the details of some of the best benefits of leasing an electric vehicle for your business.

Benefit in Kind (BiK) rates for EVs

Starting off with a belter, we have Benefit in Kind (BiK) rates. Electric vehicles attract much lower BiK rates compared to their ICE counterparts.

For EVs, it’s currently 3%, which is significantly less than the maximum 39% for petrol and diesel vehicles.

Your employees will love the reduced tax burden, and your bottom line will thank you too.

But what does this mean? We’ll break it down with an example.

If you’re providing a £40,000 EV to an employee who earns £50,000 per annually, they’d pay tax on just 3% of the vehicle’s worth (3% of £40,000 = £1,200).*

Compare that to a similar petrol vehicle worth the same, they could be paying tax on up to 37% of the vehicle’s worth (37% of £40,000 = £14,800), which is an enormous difference.

And the EV BiK rates are predicted to remain competitive, and currently predicted to increase by 1% in the next three years, meaning it’ll still only be 8% in 2028.

*Prices correct at time of publication

Corporation Tax deductions and capital allowances

100% of monthly payments can be offset against Corporation Tax as a business expense with an EV business lease.

Unlike your usual vehicle purchases where you’d face restrictions on tax relief, EV lease payments get the full treatment. Every single penny of your monthly lease payment – whether it’s £200 to £800 – can be deductible from your taxable profit.

Here’s the cherry on the top.

You know those maintenance packages that cover servicing, repairs, tyres and breakdown cover? They’re all fully deductible too.

VAT benefits

VAT implications are a big selling point of EV business leases.

Businesses can claim back 100% of the VAT on lease payments if primarily used for work. This goes down to 50% if the vehicle is used for leisure purposes as well as business.

Initial and monthly payments

No one likes to see £45,000+ come out of their business bank account for one singular EV.

And let’s not think about the costs of a fleet over five or more vehicles.

This is what makes EV business leasing so good. Your EV business lease costs will be the initial payment (typically the equivalent of three to nine months’ worth of payments), followed by your monthly payments.

If your business isn’t keen to empty all its funds on some cars, you can opt for a no deposit lease to get you and your team in the driver’s seat - but bear in mind this will increase your monthly payments.

Predictable monthly payments

Budgeting’s never going to be your favourite job as a business owner, especially when managing a fleet of older cars with unpredictable problems and costs.

With EV leasing, you’ll have predictable monthly payments, brand-new reliable vehicles, and no depreciation scares. Adding on a maintenance package takes away the unpredictable repair costs, all packaged up in your monthly fee.

Just clear, consistent costs that make your financial planning as smooth as an electric motor.

Government grants and incentives

The UK government have various EV grants and schemes to encourage people to make the switch to electric, including an EV chargepoint grant, Workplace Charging Scheme, and discounts on buying new EVs costing £37,000 or less.

So, we’d recommend getting ahead of the curve while all the benefits are still in place, as grants and schemes have a habit of disappearing or being reduced.

Salary sacrifice schemes

Salary sacrifice schemes for electric vehicles are a genuine win-win.

Your employees exchange part of their gross salary for the car lease, saving on income tax and National Insurance Contributions (NIC), while your business saves on Class 1 NIC.

It's an employee perk that costs your business nothing extra but delivers sizeable savings on monthly car payments – all while creating a more reliable, safer and greener fleet.

How to choose the right EV for your business

Once you’ve decided to make the electric switch, choosing which vehicle(s) to lease comes next. And it’s not an easy decision with so many great options on the market.

Assessing your business needs

First, you’ll need to think about what your business wants to get out of its EV business lease.

You’ll need to ask yourself a couple of questions.

• What are you and your employee’s mileage patterns?
• Where do the vehicles reside?
• How often are you doing long journeys?
• Who will be driving these cars? Are they tech-savvy? Will it be to transport equipment?
• What image do you want your fleet to portray? Professional or functional?

You have the choice to get EVs that suit your business, so tailor it to your needs.

Range requirements

We’ve all heard of that pesky range anxiety, but it’s mostly based on outdated information.

Most new EVs can handle a variety of business needs, so we can make sure you get the right one.

When checking the range on an EV, the WLTP Comb range will be presented, but this figure is the range in ideal conditions. And, as we know, life rarely provides us with ideal conditions.

Real-world range is typically 10-20% lower, then cold weather can also reduce range by 15-30%. City driving will get the most miles out of your range.

To see what range requirement your EV needs, calculate your daily miles, plus a 25% buffer, so you’re never left short.

Popular EV models for business

Now you’ve thought about what your business needs and any mileage requirements, you’ll have an idea of what to look out for when browsing EVs.

Here are some of the most popular EVs for business leasing:

Long range business EVs:

• Tesla Model 3 – up to 436 miles (WLTP Comb)
• Volkswagen ID.7 – up to 436 miles (WLTP Comb)
• Polestar 3 – up to 438 miles (WLTP Comb)
• Mercedes-Benz EQE – up to 431 miles (WLTP Comb)
• Audi A6 e-tron – up to 438 miles (WLTP Comb)

Good value business EVs:

• MG4 EV – up to 281 miles (WLTP Comb)
• Kia EV3 – up to 375 miles (WLTP Comb)
• Volvo EX30 – up to 296 miles (WLTP Comb)
• BYD SEAL – up to 354 miles (WLTP Comb)

If you want to grab a great deal, we round up our best business lease deals and best electric deals monthly to check out.

EV charging solutions for businesses

When adopting the EV life, it doesn’t just stop at the car.

The charging infrastructure needs to be there too. You want EV charging to be as simple as plugging in your phone overnight.

Workplace charging options

Installing EV chargers at work is cost-effective, convenient, and your employees will really appreciate it. There are a few types of workplace charging:

7kW slow chargers

These chargers are the most common and can charge majority of EVs in six to eight hours. They require minimal electrical infrastructure in place.

Typically, they cost £800-£1,500 per unit installation, and long-term this will definitely pay off.

Perfect for cars staying at base overnight.

22kW fast charger

A step up from the slow chargers with 15kW more, 22kW charge most EVs in two to four hours, but may require electrical upgrades.

Typical cost per unit installation is £1,200-£2,200, but if you need your fleet to have quick top ups before hitting the road, these are perfect.

50+kW rapid chargers

For EV chargers 50+ kW to be installed, you’ll be looking at over £10,000 per unit, which isn’t in everyone’s price range.

But with the ability to charge 80% in 20 to 30 minutes, it’ll help you upgrade your business fleet’s productivity.

Although when overnight or a full day’s work (if used just for commuting) charging is on the cards, you don’t have to break the bank to charge your fleet.

Public charging network access

While workplace and home charging should cover most of your fleet's needs, public charging is essential for longer journeys, and employees without home charging facilities.

The major UK charging networks include:

• Tesla Supercharger: Premium network now being opened up to other EVs
• BP Pulse: Extensive rapid charging network with reliable coverage
• IONITY: European-wide ultra-rapid network for long-distance travel
• InstaVolt: UK’s largest swift charging network, with rapid and ultra-rapid chargers
• GRIDSERVE: Covering the UK motorway network, providing sustainable electric charging

Charging speeds and locations:

• Slow (3-7kW): Town centres, car parks – 6-8 hours
• Fast (22kW): Shopping centres, workplaces – 2-4 hours
• Rapid (50kW+): Motorway services – 30-60 minutes
• Ultra-rapid (150kW+): Premium locations – 15-30 minutes

You can set up corporate accounts with major networks and provide charging cards to employees for seamless access – no more fumbling around with different apps like you're trying to crack the Da Vinci Code just to plug in.

Map regular business routes with charging locations and identify backup options for peak times, because there's nothing quite like arriving at a charging point to find three other drivers having the same idea.

And consider negotiating preferential rates based on projected usage volume – many networks offer business discounts for fleet customers.

Who doesn't love a good bulk discount?

The EV business leasing process

Eligibility requirements

Who’s eligible for an EV business lease?

Pretty much any business can apply for EV leasing – sole traders, limited companies, partnerships, and Limited Liability Partnerships (LLPs).

We work with a wide range of funders and dealerships to source the best deals for you, regardless of whether you're a multinational corporation or a one-person operation run from your kitchen table.

Most funders prefer businesses that have been trading for two years or more with full company accounts and a solid trading history, though newer businesses can still apply.

We won't refuse to help any business looking for a lease, even if you're a start-up with limited credit history.

Application process and credit checks

A business lease follows the same application process as any lease car.

Simply find your dream lease and submit an application – but we'll need a few extra details from you.

Essential business documentation:

• Company registration number
• Years of trading
• VAT number
• Trading address
• Directors' details
• Company bank details

Additional requirements for newer businesses: Companies trading for less than two years will typically need to provide their latest accounts and may require additional financial documentation, depending on the funder's requirements.

Application timeline: Most applications receive approval within 24-48 hours, though this can take longer if funders request more information or clarification.

Fleet advantages: Larger vehicle orders often qualify for fleet discounts, with savings varying by funder, vehicle type, and order quantity. There's no fixed minimum threshold – even modest fleet sizes can access preferential rates.

Delivery and handover

Our Customer Experience team will organise delivery once all documentation is complete and the vehicle is available.

Lead times vary from 7-10 days for in-stock vehicles, to considerably longer for factory builds.

The dealership will contact you before delivery, with the driver calling an hour beforehand. Check the vehicle's condition thoroughly before signing, this is called a Pre-Delivery Inspection (PDI), as any issues not noted on handover documentation can't be rectified later.

Contract terms to negotiate

Our lease contracts are highly customisable to fit your business needs, giving you flexibility on the terms that matter most to your operation.

Key terms you can adjust:

• Annual mileage limit - Match your actual driving requirements, if you don’t set a realistic limit, you’ll face excess mileage fees at the end of your lease 
• Initial rental - Adjust upfront costs to suit your cash flow
• Lease length - Typically two to four years
• Vehicle specification - Features and colours (factory orders only)

Additional negotiable elements:

• Maintenance packages – Peace of mind for servicing and repairs
• Fleet discounts - Volume pricing for multiple vehicles

EV vs combustion: Business comparison

The decision between electric and traditional vehicles isn't just about being environmentally conscious – it's about making smart business choices that impact your bottom line, operational efficiency, and long-term planning.

Triple bottom line

Beyond the environmental impacts, EVs offer a genuine business advantage.

And we’re not on about the tax savings again…

Carbon footprint:

• Electric vehicles: Zero direct emissions, indirect emissions from electricity generation
• Petrol/diesel: Direct CO2 emissions plus fuel production impact
• UK electricity grid: Increasingly renewable – in the first quarter of 2025, 46.3% of the UK’s electricity generation was renewable energy

Real-world emissions:

• Electric vehicle: 50-100g CO2/km (including electricity generation)
• Petrol vehicle: 165-258g CO2/km
• Diesel vehicle: 170-190g CO2/km

Business benefits:

• Clean Air Zone compliance: EVs are exempt from charges in Birmingham, Bath, Bristol, Portsmouth, Sheffield, Manchester, Bradford, Newcastle-upon-Tyne, and Gateshead
• ULEZ compliance: No daily charges in London's Ultra Low Emission Zone
• Corporate sustainability: Demonstrates environmental commitment to customers and stakeholders
• Futureproofing: Ahead of the 2030 new petrol and diesel sales ban
• Employee satisfaction: Higher rate of satisfaction for employees – they tend to prefer working for environmentally responsible companies.

Really tackling that triple bottom line there.

Maintenance cost comparisons

Electric vehicles have fewer moving parts under the hood, so naturally there are less things that will need checking and replacing. Prices will vary from car to car, and location, but typically, EVs will be cheaper to maintain.

For both combustion and electric vehicles, MOT costs stay the same, but the main difference will come down to servicing and breakdowns.

But when adding a maintenance package to your EV business lease, you won’t have to worry about any of these issues.

Performance and reliability

Modern electric vehicles offer instant torque, smooth operation, and typically faster acceleration – perfect for those satisfying moments when you need to merge into traffic.

There’s something deeply satisfying about leaving a petrol or diesel vehicle in the dust at the traffic lights without making a sound.

Much like a polite superhero.

EVs provide 250-400+ miles of range with 30–45-minute charging time. And, as the majority of business journeys are under 100 miles, range anxiety these days is about as relevant as worrying about running out of petrol on your way to the corner shop.

EVs, on the whole, now match or exceed petrol/diesel reliability, with fewer mechanical failures.

Turns out having fewer things that can break is quite handy.

Who would’ve thought removing hundreds of moving parts in an engine would make it more reliable?

Although cold weather can reduce range by 15-30%, modern heat pumps and pre-conditioning capabilities mitigate this impact.

Future-proofing your business with EVs

The automotive world is going electric.

It’s undeniable, and you don’t want to be left behind.

With the help of our lovely leasing consultants at Carparison we can help get you in the driver’s seat quicker than you can say “zero emissions”.

2030 petrol and diesel ban implications

The UK government will ban new petrol and diesel car sales by 2030, with hybrids following in 2035. This means lease renewals after 2030 will be electric-only.

Upcoming EV technology

The latest battery advancements are exciting to say the least, with solid-state batteries promising 10-80% charge in just 10 minutes, increased lifespan and range.

And there are constant improvements in charging units and infrastructure.

As of July 2025, MFG EV Power reached 1,000kW ultra-rapid charging bays.

We’re 100% sure the improvements won’t be stopping there.

Changing regulations and infrastructure developments

We’re sure you’ve noticed, but more cities are implementing Clean Air Zones with charges for high emission vehicles, while EVs remain exempt.

The Government investment of £6 billion is building towards expanding and improving public charging points by 2030, making electric driving increasingly convenient.

Tax policy continues to favour EVs, with low BiK rates locked in until 2028, while traditional fuel costs face upward pressure from potential duty increases.

Environmental benefits and Corporate Social Responsibility (CSR)

Zero emissions, need we say more?

But in a world where going green isn’t just good for the environment, but your business’s image and bank account, zero emissions driving is becoming increasingly important.

Environmental responsibility isn't just about reducing your carbon footprint – it's about building a business that attracts customers, retains employees, and stays ahead of regulatory changes.

Saving the planet is quite literally good for business these days.

An electric fleet demonstrates that you're not just keeping up with change, but leading it.

That 2030 petrol and diesel ban is getting closer, don’t wait.

So, why choose EV leasing for your business?

By now, you’ll understand why EV business leasing has become the smart choice for forward-thinking companies across the UK. We’ve brought you the hard facts without the corporate jargon.

The financial case is compelling: With low BiK rates, the opportunity to reclaim VAT, full Corporation Tax deductions, and predictable monthly payments, your bottom line will thank you.

Add in government grants and salary sacrifice schemes, and the savings become even more attractive.

The operational benefits are quite something – brand-new, reliable vehicles with minimal maintenance requirements. Add zero emission compliance for Clean Air Zones and instant torque that leaves combustion counterparts at the start line.

Whether you’re worried about charging infrastructure, curious about the tax benefits for your business, or how the whole EV business lease process works, we’ve got you covered.

The question isn't whether you should make the switch – it's how quickly you can get started.

Ready to join the thousands of businesses already driving electric? Your fleet – and your accountant – will thank you for it.