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Advice: Business car leasing: how to negotiate today’s tough credit checking – Mike Moylan, managing director, CC Leasing

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Credit checking is now an important element of getting a business car lease approved by a finance company, so ensuring your company meets the key factors credit checking companies look for will help your business successfully apply for a business car lease

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22 May 2011

Business car lease: professional advice on credit
Credit checking is now an important element of getting a business car lease approved by a finance company, so ensuring your company meets the key factors credit checking companies look for will help your business successfully apply for a business car lease

DECISIONS on car leasing can no longer be confined solely to the make and model of car, or the cost of the monthly contract hire lease.

Your company credit history and credit score will be calculated when you take out a car lease.

So if you have concerns about your credit history/score, or feel there may be any inaccuracies, you can check at credit reference agencies such as Equifax and Experian.

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If you have done some credit checking with a credit reference agency before you apply for a business car lease, this will ensure you are fully aware of the situation and that you can request amendments if appropriate.

Your credit score will have a direct impact on the finance deal you will be offered. A poor credit score could result in penalties such as higher interest rates or larger down payments.

Take your time to research via the internet or speak to car lease specialists – such as BVRLA car leasing brokers – who can advise you on the kind of offers that would be open to you with your credit score.

If you have poor credit you are unlikely to be able to benefit from the best deals but they will probably be able to find you a deal that suits your circumstances. You could also contact the Federation of Small Businesses (FSB) for advice. This measure will help to avoid a situation where you are turned down for credit following credit checking or offered an expensive deal and decide to make multiple applications for lease funding, as multiple applications or refusals to finance can damage your credit rating.

Factors which will help you to achieve a good credit score are:

  • Address – consistent registered office address
  • Company officers – few changes of officers
  • Suppliers – whether you pay your suppliers in a timely fashion
  • Trading – number of years you have been trading
  • Year end date – consistent year end date

Factors which will count against you are:

  • CCJs and other judgements
  • Levels of commitment to service existing debt and number of suppliers of existing finance
  • Statutory arrears

Finally, remember you can offer to provide additional information to finance houses such as up-to-date financials or reasons why changes have occurred within the company.

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Ralph Morton

Ralph Morton

Ralph Morton is an award-winning journalist and the founder of Business Car Manager (now renamed Business Motoring). Ralph writes extensively about the car and van leasing industry as well as wider fleet and company car issues. A former editor of What Car?, Ralph is a vastly experienced writer and editor and has been writing about the automotive sector for over 35 years.

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