Whether you're a sole trader or run a limited company, buying a company vehicle can be a smart, tax-efficient decision. It can help you meet daily operational needs, enhance your professional image, and unlock financial benefits.
But with so many options and rules to navigate, it’s important to know what to look for.
In this guide, we’ll explore the benefits of buying a company car, what to consider before making a purchase, and how Foray Motor Group can help you choose the right vehicle for your business.
Buying a car through a limited company can bring a range of financial and practical benefits, such as:
Buying a car for business reasons as a sole trader can also offer tax advantages.
When it comes to choosing a company car, there are various factors you will need to consider, including intended use, fuel, and ongoing costs.
Before you buy a company car, ask yourself:
For sole traders especially, a company-branded car or van can double as a mobile advert – a great way to increase visibility while on the move.
If you're a self-employed electrician doing local jobs with lots of tools and equipment, a compact van like a Ford Transit Connect may be more practical than a standard hatchback. On the other hand, a sales rep driving hundreds of motorway miles a week might prioritise fuel economy and comfort, making a hybrid estate car a better business investment. Your answers can help steer your decision towards the right type of vehicle.
With petrol and diesel vehicles being phased out from 2035, now’s a good time to consider the benefits of hybrids and electric vehicles:
When buying a business vehicle, factor in more than just the purchase price. You should also consider the ongoing running costs, such as:
There are multiple ways to finance a company car:
When a limited company buys a vehicle, it becomes a business asset – and that affects VAT, tax treatment, and how it’s used.
Buying a van through a limited company offers additional perks – vans are classed as plant and machinery, meaning you can claim 100% tax relief through the Annual Investment Allowance. Find out more about Van Tax.
So what’s best for your company? A standard company car used privately is subject to Benefit-in-Kind (BIK) tax, based on its CO₂ emissions and list price – which can add a significant annual cost to your personal tax bill. By contrast, if you opt for a van that qualifies under HMRC’s rules and use it mainly for business, the tax liability is usually much lower – and the business can potentially reclaim more VAT and get full capital allowances in year one. So, if you’re on the fence between a car or a van, tax treatment could be the deciding factor.
Speak to the Foray team to help you choose the right option for your business.
A company vehicle must be insured correctly. Business use is different from personal use, so you’ll likely need a business car insurance policy.
At Foray, we make it easy to buy a company car or van.
Whether you are purchasing a company car to add to your growing limited company or are buying a van as a sole trader, we offer a wide range of cars and commercial vehicles suitable for your business needs.
What’s more, our expert team can offer professional advice on financing options.
Contact Foray Motor Group today or visit your nearest dealership.
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