Company purchase
A limited company or LLP can buy a classic car on hire purchase or lease purchase, with the agreement in the company name and the car held as an asset of the business.
- FOR
- Limited companies and LLPs
- USED FOR
- Buying through the business on hire purchase, lease purchase or with a balloon payment
How it works
You choose the structure. Hire purchase spreads the whole balance over the term and the company owns the car at the end. Lease purchase leaves a balloon payment at the end, which keeps monthly payments lower and can be settled, refinanced or covered by selling the car.
The deposit usually comes from the company, and the agreement runs in the company name. Lenders often ask a director to give a personal guarantee.
Because the borrower is a company rather than an individual, the agreement is not regulated consumer credit, whatever the amount.
How the car is treated for tax depends on how the business uses it. Speak to your accountant before you commit.
What a lender looks at
- 01Filed accounts, and management figures where the last set is old.
- 02What the company does and why the car sits in it.
- 03An independent valuation of the car and, on older cars, an inspection.
- 04Where the car will be kept and how it will be insured.
Not for: Buying in your own name for personal use. That is regulated consumer credit, so the enquiry is handled through one of our regulated partners rather than by us directly.
Company, sole trader or partnership: what changes
A limited company or an LLP is not an individual, so its borrowing sits outside the consumer credit rules whatever the amount. There is no threshold to clear and no declaration to sign.
A sole trader or a small partnership is treated as an individual under the Consumer Credit Act. Borrowing is exempt only where the agreement is for more than £25,000 and the credit is wholly or predominantly for business purposes. Below that figure it is regulated consumer credit, which we cannot arrange.
The business purpose is not a box to tick lightly. It is a declaration about how the car will actually be used, and it belongs on the file honestly. A car bought through a business but used entirely privately is a different thing from a car that genuinely works.
Lenders will usually ask a director or member to give a personal guarantee, particularly on a younger company or a larger advance. That guarantee is a separate obligation from the agreement itself.
How the car is treated for tax, including capital allowances, VAT and any benefit in kind, depends on the use it is put to and on your own circumstances. We do not give tax advice, and this is a conversation to have with your accountant before you commit rather than afterwards.
Questions
Can my company buy a classic car on finance?
Yes. A limited company or an LLP can buy on hire purchase or lease purchase. The agreement is in the company name and is not regulated consumer credit, because the borrower is not an individual.
Will I have to give a personal guarantee?
Often, yes. Many lenders ask a director or member to guarantee a company agreement, particularly on a younger company or a larger advance.
Is there a minimum amount for company finance?
No statutory minimum applies, because company borrowing sits outside the consumer credit rules. Individual lenders set their own minimums.
Finance on this page is arranged for limited companies and LLPs, for sole traders and partnerships borrowing over £25,000 wholly or predominantly for business purposes, and for individuals borrowing over £60,260 who have signed a high net worth statement. Send us the details either way: cases outside that are handled through one of our regulated partners, and we tell you who before anyone contacts you.
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