Using a Zipcar van during a photoshoot
Using a Zipcar van during a photoshoot

Leasing, buying, or car sharing – which is best for small businesses?


Small business owners who regularly need to use a vehicle for work will inevitably face the question, what options do you have around buying, leasing, or renting a car?

From tax implications to the financial commitment, the decision to buy, lease or use car-sharing with a company such as Zipcar depends on a variety of factors. Read on to decide whether leasing, buying or car sharing is best for your business.



Car sharing or short-term car hire for small businesses

Business car sharing and short term hire gives businesses a huge amount of flexibility and enables them to effectively manage costs by only paying for the time they need the vehicle. 

  • There’s no need for a company car policy – using a car sharing service, like Zipcar for Business, gives your employees access to thousands of vehicles whenever they need it without the financial commitment and risk of a company car policy.
  • The self-serve booking system, via both web and app, makes it easy to locate and rent a car whenever you need it.
  • With car sharing, you only pay for the time you need a vehicle, saving your business money.
  • Vehicle maintenance is looked after by the car sharing company, so you don’t have to worry about depreciation
  • All additional costs are covered within the cost of each reservation. Zipcar for Business includes fuel, insurance, breakdown cover, mileage, congestion charge and ULEZ fees as part of your hourly rates.
  • Plus, with Zipcar for Business all invoicing is done monthly under one account, so you can see all the utilisation and costs across the business and your team who are driving.
  • Business car sharing often gives members access to the same rental cars and vans at discounted weekday rates vs. standard consumer rates. For example, Zipcar for Business members benefit from 30% cheaper prices on weekdays.
  • With Zipcar for Business, you have the option to make regular and bespoke reservations for specific cars, whether that’s a van to make your deliveries or a sleek vehicle to meet and greet clients.
  • Unlike car leasing or ownership, hiring a car through Zipcar for Business gives you a much more flexible way of getting around London. There’s no struggle finding somewhere to park on central London streets as one-way Flex Zipcars don’t require a parking permit in many boroughs (within the Zipzone). Plus, once you’ve parked up there’s no niggling worry about theft, break-ins, or damage.
  • Zipcar For Business allows companies to book cars for Exclusive Use for long term business hire or regular intervals, creating a bespoke package to suit your business needs – including creating vehicle branding.
  • Car sharing with Zipcar for Business gives you much more flexibility to scale your business up or down without the risk of large upfront costs or contracts. If you need a bigger fleet, simply hire more vehicles!
  • For those concerned about their carbon footprint, car sharing with Zipcar for Business is a more sustainable transport option than owning or leasing. Every Zipcar takes the place of about 13 permanently owned cars, and covers the transportation needs of about 40 members.
  • As it is a shared service sometimes your closest vehicle will be in use by another member. But as Zipcar provides over 3,000 cars and vans to our members, your next nearest vehicle is only around the corner.

Leasing a car for small businesses

  • Small business car leasing gives you access to a newer car with a lower upfront cost. The car will also be under warranty.
  • Leasing a company car is beneficial for small businesses for tax purposes, as you can claim back the VAT as a business expense.
  • Servicing and maintenance are offered as an add-on in many leasing packages so there’s
  • If your business faces financial difficulties, a leased car won’t be considered an additional asset and can’t be sold to cover debts.
  • Leasing commits your business to regular monthly payments. If your business encounters difficulties during your lease contract, these payments might affect your cash flow.
  • The cost of leasing a vehicle often factors in annual mileage. If you travel long distances in your lease car, your monthly payments will be more expensive. Many providers won’t lease you a car if you clock up over 30,000 miles per year.
  • You’re required to cover the costs of insurance, petrol, breakdown cover and congestion charge. While this may seem obvious, car sharing providers often include

Buying a car for small businesses

  • You can buy a new or used car depending on your available budget.
  • Your vehicle will be considered a company asset and can be taken to pay an outstanding debt if your small business is struggling.
  • Owning a car can give you depreciation deductions on your tax payments. To qualify for tax benefits for business use, you’ll need to prove that the car is being driven
  • Depreciation means the car you buy loses its value over time, so it’s highly unlikely you’ll get the amount you pay for it upfront back again when you sell it on.
  • The government’s recent pledge for all new cars to be fully electric by 2030 could make selling used petrol and diesel cars more difficult in future.
  • Buying a car is a big expense for many small businesses and may affect your cash flow or require taking out a loan.
  • Owning a car is less environmentally friendly than car sharing, as car owners are more likely to make smaller and more regular trips, and the vehicle itself is often left parked and unused.
  • Parking spaces in cities are hard to come by and often expensive. Monthly permits and pay and display charges quickly add up, while car sharing companies usually have agreements with the council that allows you to park their vehicles without incurring fees.
  • You are liable for all fees involved with running a car, such as fuel, insurance, congestion charge, roadside cover and ULEZ fees, dependent on the age of your vehicle.
  • When you own a car, you’re paying for the likes of insurance, tax and MOT when most of the time it isn’t in use. The typical UK car is parked for 96.5% of the time. With car sharing, you only pay for the time the car is being used.

If you’re struggling to decide between leasing, buying and car sharing, Zipcar For Business is a flexible, sustainable and simple to use alternative that gives companies like yours access to over 3,000 vehicles near where you live and work.