Buying a Car Through Your Limited Company: How Business Car Finance Works

Many business owners don’t realise their limited company can buy the car, not just them personally. Business car finance lets your company fund a new or used car on monthly payments, keeping personal and business finances separate and protecting your cash flow. Boost Finance works with specialist lenders who understand limited company car finance, including for prestige and performance cars and for businesses that mainstream lenders turn away.

Here’s how it works, with two recent Mercedes deals we arranged for limited companies.

Two recent deals: a GLC 300e and an AMG CLA 45 S

Mercedes-Benz GLC 300e 4MATIC for a Greater Manchester property company

• Car: 2026 Mercedes-Benz GLC 300e 4MATIC Urban Edition, MANUFAKTUR Alpine Grey, around 6,600 miles
• Price: £42,400
• Finance: hire purchase over 60 months with a final balloon payment
• Buyer: a limited company in the property sector, Oldham

This customer had struggled to get finance elsewhere before coming to Boost. We placed the deal with a specialist lender that understood the business, at a rate that came in below the dealer’s own finance quote, with a balloon that kept monthly payments manageable.

Mercedes-AMG CLA 45 S for a Lancashire business

• Car: 2024 Mercedes-AMG CLA 45 S Plus, around 11,000 miles
• Price: £49,989, with a £5,000 deposit
• Finance: hire purchase over 60 months with a final balloon payment
• Buyer: a limited company in the environmental services sector

Again, our lender’s rate and balloon figure beat the dealer’s finance quote, so the company saved money and kept the monthly cost under control on a high-performance car.

In both cases the customers got the exact cars they wanted, bought by their companies, on terms that suited their cash flow. Fast, flexible finance: your business, financed.

Can a limited company finance a car?

Yes. A limited company can buy a car on finance in the same way it would buy a van or a piece of equipment. The agreement is in the company’s name, the payments come from the business, and on hire purchase the company owns the car once the final payment is made. Sole traders and partnerships can also finance cars for business use.

Finance options for buying a car through your business

• Hire purchase (HP): fixed monthly payments, and the company owns the car at the end. Adding a balloon payment lowers the monthly cost by deferring part of the price to the end.
• Lease purchase: lower monthly payments with a final balloon, popular for high-value cars that hold their value.
• Refinance and equity release: raise funds against a car the company already owns, or refinance an existing agreement.

How a balloon payment works

A balloon is a final lump sum, set at the start, that’s paid at the end of the agreement. Because part of the price is deferred, the monthly payments are lower. At the end you can pay the balloon and keep the car, refinance it, or sell or part-exchange the car to settle it. If the car is worth less than the balloon at the end, the difference has to be covered, so it’s worth choosing a sensible figure.

Why some businesses struggle to get car finance

• Newer companies with limited accounts or trading history
• High-value or performance cars that mainstream lenders are cautious about
• Complex finances, such as property companies with income tied up in assets
• Dealer finance that doesn’t fit, with high rates or a single lender’s criteria

As a broker, we go to the lenders most likely to approve your deal on the best terms, including specialist lenders for limited company car finance, and we deal with the dealer for you.

What you’ll need

• Your company name and number (we can look these up on Companies House)
• Recent accounts or business bank statements
• Details of the directors
• The car you want and where you’re buying it from

Things to know

• Tax: buying a car through your company affects benefit-in-kind, capital allowances and VAT, and the rules depend on the car’s CO2 emissions and how it’s used. Plug-in hybrids like the GLC 300e often have lower benefit-in-kind than petrol cars. Always check with your accountant; we don’t give tax advice.
• Personal guarantee: lenders may ask a director to guarantee the agreement.
• The balloon: it must be settled at the end, by paying, refinancing or selling the car.

Finance a car through your business with Boost

Whether it’s a Mercedes, a Porsche, a Range Rover or a supercar, Boost Finance arranges car finance for businesses and individuals, with specialist lenders for sports and performance cars, luxury cars and supercars. Based in Cheshire or South Manchester? See our prestige car finance in Cheshire.

Get a quote and we’ll compare the options for the car you want.

Finance is subject to status. Rates, deposits and balloon figures depend on your circumstances, the car and the lender, and the deals above were specific to those customers. Boost Finance is a credit broker, not a lender.