Can a self-employed person lease an electric company car?
As a self-employed person, you are responsible for your own transport. For many self-employed people, a reliable company car is not a luxury but a necessity. The only question is: how can you finance it wisely? Leasing an electric company car is becoming an increasingly attractive option for the self-employed, especially now that the range of electric vans and commercial buses has grown significantly and the tax benefits are tangible.
In this article, we answer the most frequently asked questions about leasing an electric commercial vehicle as a self-employed person. From the benefits and costs to the requirements of leasing companies and what to look out for when choosing a vehicle. Whether you’re looking for a small van or a double-cab commercial van, you’ll find a clear overview here.
Can a self-employed person lease an electric company car?
Yes, a self-employed person can lease an electric company car. Both finance leases and operating leases are available to the self-employed, provided you meet the leasing company’s requirements. These include registration with the Chamber of Commerce, a demonstrable income and, in some cases, a minimum period of self-employment.
Leasing an electric company car as a self-employed person works in essentially the same way as it does for a larger company. You enter into a lease agreement for a specific period, pay a monthly fee and drive a vehicle registered in the business’s name. The advantage for self-employed people is that you do not need to commit a large amount of your own capital and the costs remain predictable.
It is worth noting, however, that not every leasing company is equally willing to enter into a contract with self-employed people who are just starting out. The longer you have been in business and the more stable your turnover, the greater your chances of being approved. Some providers ask for a deposit or impose stricter requirements on new entrants. It is therefore worth comparing several providers.
What are the benefits of an electric car lease for self-employed people?
Electric vehicle leasing offers self-employed people several tangible benefits: lower tax liability, no fuel costs, tax deductibility of the lease payments and lower maintenance costs. What’s more, you get to drive a modern vehicle without having to pay a large upfront purchase price, which helps protect your business’s cash flow.
Tax benefits
One of the biggest advantages is the additional tax liability. Fully electric company cars are subject to a lower additional tax liability than fuel-powered vehicles. This directly reduces the tax you pay on the private use of the car. Always check the current rates with the Tax and Customs Administration, as these may change from year to year.
In addition, the monthly lease payments for a self-employed person are tax-deductible as business expenses, provided you use the car for business purposes. This reduces your taxable profit and, consequently, your income tax. If you combine this with the lower additional tax liability, a leased electric company car can prove to be considerably more tax-efficient than a comparable petrol or diesel car.
Lower operating costs
Driving an electric car works out cheaper per kilometre than driving a petrol or diesel car. Especially if you charge your car at home or at low-cost charging points, your running costs will drop significantly. What’s more, electric vehicles have fewer moving parts, which means you’ll spend less on maintenance. No oil changes, less brake wear and, generally speaking, fewer breakdowns.
For self-employed people who cover many kilometres every day – for example, in the logistics or construction sectors – these savings can quickly add up. A small electric van or double-cab van Leasing therefore offers you a clear cost advantage in the long term.
What is the difference between a finance lease and an operating lease?
With a finance lease, you finance the vehicle and become the owner at the end of the term. With an operational lease, you hire the car for a fixed period and return it at the end. An operational lease often includes maintenance and insurance, whilst a finance lease gives you more responsibility, but also more control over the vehicle.
Financial lease
With a finance lease, you pay a monthly amount which effectively allows you to pay off the company car. At the end of the lease term, the vehicle becomes yours. This is a good option if you want to use the car for a long time or if you value ownership. The downside is that you are responsible for maintenance, insurance and any repairs.
For self-employed people who want to buy a small van but would prefer to spread the cost over time, a finance lease is a good alternative to an outright purchase. It allows you to work towards ownership, as it were, without having to come up with a large sum of money straight away.
Operational lease
With an operational lease, you pay a fixed monthly amount for the use of the company car. Maintenance, insurance and, in some cases, tyre servicing are often included in the package. At the end of the lease term, you return the vehicle and can opt for a new model. This ensures maximum predictability in terms of costs.
For self-employed people who don’t want the hassle of managing a vehicle, an operational lease is a great option. You know exactly where you stand and don’t have to worry about the car’s residual value. Do you want to drive a modern, well-maintained business van or delivery van at all times? Then an operational lease is the perfect solution for you.
What requirements do leasing companies impose on self-employed people?
Leasing companies usually impose the following requirements on self-employed individuals: a valid Chamber of Commerce registration, at least one to two years of demonstrable business activity, recent annual accounts or tax returns, and sufficient income to cover the lease payments. New businesses are sometimes required to pay a higher deposit or security deposit.
The exact requirements vary from provider to provider. Some leasing companies carry out a credit check via the BKR. A negative BKR record makes it more difficult to take out a lease, but does not always rule it out. There are providers that specialise in working with self-employed people in various situations.
Have you been self-employed for less than a year? If so, it’s a good idea to set aside a security deposit or look for a co-financier. Some leasing companies also accept a business bank account with a sufficient balance as proof of financial stability. In any case, make sure your paperwork is in order before you submit an application.
How much does it cost to lease an electric company car?
The monthly lease payment for an electric commercial vehicle varies considerably and depends on the type of vehicle, the lease term, the annual mileage and the type of lease chosen. For a small electric van, prices start at roughly a few hundred euros a month, whilst a larger electric double-cab commercial van costs considerably more.
Factors that determine the price
- Vehicle type: A compact electric van is cheaper than a heavy commercial van or refrigerated van.
- Duration: A longer term generally reduces the monthly instalment, but does mean a longer commitment.
- Annual mileage: The more kilometres you drive, the longer the lease term. Estimate your mileage realistically to avoid having to pay extra.
- Down payment: A higher deposit reduces your monthly payments.
- Services included or excluded: With an operational lease that includes maintenance and insurance, you pay more each month, but you have fewer unexpected costs.
Please also bear in mind that electric company cars have a higher purchase price than comparable petrol or diesel vehicles. This results in higher monthly lease payments. However, the lower fuel and maintenance costs partly offset this. Always calculate the total costs over the entire term of the lease, not just the monthly payment.
Grants and schemes
There are schemes that make purchasing or leasing an electric company car more attractive for business owners. These include the MIA (Environmental Investment Allowance) and the Vamil scheme, which allow you to claim a tax deduction on part of the investment. Check with your accountant or tax adviser to find out which schemes apply to your situation, as this could significantly reduce your net costs.
What should you look out for when choosing an electric commercial vehicle?
When choosing an electric commercial vehicle, consider its payload capacity, driving range, the charging infrastructure in your working area, the availability of charging facilities at home or at work, and the total cost of ownership. Choose a vehicle that suits your day-to-day needs, not an idealised version.
Range and payload
The driving range of an electric commercial vehicle varies by model. For self-employed people who drive long distances every day or regularly work outside the city, a long driving range is important. If you mainly drive in the city or over shorter distances, a shorter range will suffice. Also bear in mind the charging speed: how quickly can you charge the vehicle, and where?
Are you considering an electric double-cab commercial van? If so, it’s particularly important to check the payload capacity in kilograms and the load volume in cubic metres. Electric propulsion adds weight to the vehicle, which can reduce the useful payload. Always check this before making your decision.
Charging infrastructure
Do you have the option of installing a charging point at home or at your business premises? This is an important factor when it comes to electric driving. Charging at home is usually cheaper than charging on the road. Are there enough public charging points in your area? Check this using charging point maps or apps before you make a decision.
The charging speed of the vehicle itself is also a factor. Some models support DC fast charging, which allows you to charge a large proportion of the battery in a short space of time. This is useful if you have little time between journeys. Other models charge exclusively via AC, which takes longer.
Practical considerations
Also consider the type of work you do. Do you work in the healthcare sector and need a wheelchair-accessible van? Do you work in the food industry and need a refrigerated van? Or are you looking for a versatile small van that you can use every day? The interior layout and body type are just as important as the drivetrain.
How we can help you lease an electric commercial vehicle
At Van den Hurk Commercial Vehicles, we provide practical support to self-employed professionals and business owners in finding the right electric commercial vehicle. Whether you’re looking for a small electric van, a double-cab commercial van or a specialised vehicle such as a refrigerated van or wheelchair-accessible minibus, we have a wide and varied range in stock.
Here's what we can do for you:
- Personalised advice on the best choice based on your job, mileage and budget
- An understanding of the types of lease available, including finance leases and operating leases
- Information on tax benefits and schemes that apply to you as a self-employed person
- A spacious range of new and used electric commercial vehicles in our stock
- Support from advice right through to delivery, so you can get on the road quickly and with confidence
Would you like to find out which electric commercial vehicle is best suited to your situation? Please get in touch with us or pop in to our branch in Helmond. We’d be happy to help you find the right solution and ensure you make an informed choice that suits your business.
