The best company cars need to combine many different qualities. They should be comfortable and relaxing to drive, allowing you to cover regular commutes and long-distance motorway schleps without fuss, and they should also be practical enough to mix work and family duties. Modern safety features are a must for high-mileage company car drivers, while strong resale values are also a plus, as this helps to keep leasing and contract hire rates down.
Arguably the biggest prerequisite for your next company car, though, is the ability to keep your Benefit-In-Kind company car tax bill down. The amount of tax you pay is calculated using the basic price of your car - known as the P11D value - and the BIK tax bracket in which your car sits. That bracket is determined by the amount of carbon dioxide emissions that your car produces: the higher the emissions, the higher your tax bracket, and thus the greater the percentage of your car’s P11D value you’ll pay tax on.
So, to keep tax bills as low as possible, your car needs to have low carbon dioxide emissions, or better still, no emissions at all. That’s why electric cars and plug-in hybrids have become the company cars of choice for most. Until a few years ago, the company car market was dominated by diesel cars due to their low BIK rates at the time, but changes to the way company cars are taxed turned the sector on its head and changed the company car landscape forever. Choose a conventional diesel company car these days, and tax rates will be crippling. Opt for a plug-in hybrid, however, and they’ll be much more palatable, while if you go for an EV, they’ll be all but negligible.
It’s for this reason that the majority of cars on our list below are fully battery-powered, because these result in by far the lowest tax costs. However, we appreciate that electric cars don’t suit everyone, and that if you regularly cover interstellar mileages or don’t have access to a driveway or home charger, then you’ll need a petrol engine as a failsafe. So, we’ve included some of the best plug-in hybrid options at the end.
Whatever fuel type or new car you choose, remember that it pays to shop around for the most cost-effective lease deals, because monthly payments can vary significantly from one car leasing company to another.
Best Company Cars to Lease 2024
- MG4
- Hyundai Kona Electric
- Kia Niro EV
- BMW iX1
- Tesla Model 3
- Skoda Enyaq
- Volkswagen ID.Buzz
- Plug-in hybrids
- Mercedes-Benz GLC
- Peugeot 3008
- Ford Kuga
Electric cars
MG4
As we’ve said, you pay a very low percentage of company car tax with an electric car, and that percentage stands at just 2% for the next two financial years, so in other words, you’ll be paying on just 2% of your car’s value. That means that another way of minimising your tax bill even further is by minimising the price of your car, and that’s what makes the all-electric MG4 so compelling. It’s super-affordable by electric car standards, undercutting most of the competition by thousands rather than hundreds, yet it delivers all the space, practicality, equipment and driving range you need for it to excel as both a business car and a family hatchback. It's an enjoyable car to drive, too, with darty, agile handling, a smooth ride and punchy performance.
MG4 Review
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Hyundai Kona Electric
The Hyundai Kona Electric has always been one of the more popular electric car options in the UK, and that’s despite the first-generation car being flawed in quite a few ways, including its plasticky cabin and its tight rear space. Now that the second-generation Kona has arrived, though, these flaws have been well and truly ironed out, thanks to a roomier cabin with slick design and a pleasant finish. It looks the business, too, with futuristic styling inspired by the bigger Hyundai Ioniq 5. The Kona Electric is - by some considerable distance - the best Kona to drive, too, delivering a smoother ride and better refinement - due in no small part to its quieter electric motor - than its combustion-engined cousins. What’s more, prices are reasonable and equipment is generous, even on the entry-level model.
Hyundai Kona Review
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Kia Niro EV
Back in the summer of 2021, we made a 40-minute video feature entitled the ‘Electric SUV Megatest’, in which we undertook an enormous 10-car group test of all of the mid-size electric SUV contenders on the market. The first-generation Kia e-Niro took part, and despite being by far and away the oldest car in the test, it still managed to secure second place overall thanks to the wide-ranging abilities that made it such a fantastic all-rounder. The e-NIro has since been replaced by the second-generation Niro EV (note the name change), which is even better. Not by a vast amount, granted: there have been small, incremental improvements in every area rather than game-changing ones in any particular area. But that’s fine when you’re already coming from such a high baseline, plus the latest car looks much better, has a nicer interior, and it’s still fabulous to drive.
Kia Niro EV Review
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BMW iX1
The BMW X1 might still be BMW’s smallest SUV, but that doesn’t mean it's small in the scheme of things. The car has ballooned in size compared to its predecessor, meaning it has easily enough space and practicality to deal with anything a family can throw at it. The iX1 is the all-electric version, and like the rest of the X1 range, it delivers that practicality, along with a plushly trimmed interior, lots of equipment and technology, and an exemplary infotainment system. It also delivers a supremely polished driving experience, with a comfortable ride, agile handling and superb refinement. OK, so it’s not cheap, but as company car drivers only pay tax on a teeny fraction of its price, that lofty price has little effect on the amount of tax you actually pay, so you can afford to splash out.
BMW iX1 Review
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Tesla Model 3
Tesla’s immense popularity shows no signs of abating any time soon. And while the cars themselves aren’t necessarily worthy of the unwavering adulation they receive from many quarters, there’s no denying their success, or the appealing convenience that comes courtesy of the company’s Supercharger network. We’ve gone for the Model 3 executive saloon here on our list of the best electric company cars, purely because it’s the most affordable of the breed and offers a broad spread of abilities, but the more popular Model Y SUV will do company car drivers just as well. Either way, we reckon the Long Range versions will suit company car drivers best.
Tesla Model 3 Review
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Skoda Enyaq
Remember that Electric SUV Megatest we mentioned earlier? The one in which the Kia e-Niro came runner-up? Well, that means one car managed to beat the Kia to the win in our 10-car throwdown, and - spoiler alert - that car was the Skoda Enyaq. And a few years on, we still consider the big Skoda to be the best car of its type. It has an amazing amount of cabin- and boot space and versatile packing for peerless practicality, plus it has an impressively posh-feeling interior, shedloads of standard equipment and lots of thoughtful ‘Simply Clever’ touches (an umbrella concealed in the door, anyone?) to make family life that little bit easier. It’s great to drive, has compelling range figures, and it’s also fairly affordable and great value for money. You can also have it as a coupe if the looks of the SUV are a bit plain for you.
Skoda Enyaq Review
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Volkswagen ID.Buzz
Like the Enyaq we were just talking about, the ID.Buzz is based on the Volkswagen Group’s MEB electric vehicle platform, so it’ll come as no surprise that the big VW has many of the same attributes and abilities, those including exemplary driving dynamics, compelling range figures, unimpeachable build quality and plentiful equipment. However, the ID.Buzz adds perhaps the only thing that the Enyaq is lacking: style. And by crikey, it doesn’t half deliver the stuff in spades, thanks to its funky aesthetic that pays tribute to the retro-cool Type 2 Bus of the 1950s. It’s even roomier inside than the Skoda as well, and it won’t be long until it’s available as a seven-seater. Yes, it’s enormously expensive, but like we said earlier, with the car being liable for such a small company car tax percentage, that pricetag will have a very marginal effect on your company car tax bill.
Volkswagen ID.Buzz Review
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Plug-in Hybrid Company Cars
While PHEVs won’t be as comically cheap as EVs when it comes to monthly BIK bills, they will be a sight cheaper than conventionally powered petrol or diesel cars. It’s important to remember, however, that not all PHEVs are made equal, because some are more efficient than others, and will, as a result, be more affordable on company car tax. As a result, there are a few important things to bear in mind.
If it’s going to qualify for the lowest company car tax bills possible, a plug-in hybrid must have official CO2 emissions of 50g/km or less. And for those cars that do meet that criteria, there will still be differences in tax banding depending on the amount of electric only range your car has, and this will make a very big difference on the amount of tax you pay.
If your car does less than 30 miles on electric power (according to official figures, not in the real world), then you’ll pay tax on 14% of the car’s value. Cars that do up to 39 miles on battery power will be charged at 12%. However, if your car can beat the 40-mile barrier, the your tax rate drops to just 8%, and that big drop will have a massive effect in what you pay in terms of pounds and pence. Get yourself a car that can beat the 70-mile mark - which almost no current-day PHEV can - and that tax rate drops even further to just 5%.
Mercedes-Benz GLC
You know how we literally just said that almost no current-day PHEV can beat the 70-mile mark for electric only range? Well, the word ‘almost’ is very important there, because the GLC, in 300e 4Matic guise, has a whopping official EV range of 80 miles, meaning it’s one of very few cars that qualifies for the super-low 5% banding (interestingly, the same powertrain in the C-Class, available as both a saloon and estate car, only returns between 66 and 68 miles, so that car misses out on the 5% classification, even though its figure are way superior to those of the BMW 3 Series 330e). The GLC 300e also has a fuel economy figure of 565mpg: believe that at your peril, but running costs will still be very low. It’s a great company car in other ways, too. Being a Mercedes, it has a spacious, gorgeously trimmed interior with stacks of luxury kit and a cutting edge touchscreen infotainment system, while it’s also a comfortable, refined and luxurious car to drive. And while it’s not cheap, it’s nowhere near as expensive as the Range Rover Sport P460e, which is one of the only other PHEVs to qualify for the 5% banding.
Mercedes-Benz GLC Review
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Peugeot 3008
It’s the high price of the Range Rover Sport, mentioned above, that means we can’t, in all good conscience, recommend it in this guide, despite its low tax banding. That leaves the door open for the Peugeot 3008 225 Plug-in Hybrid, which costs less than half as much, but delivers almost as much style. It’s also enjoyable to drive, stylish and plush inside and roomy enough for family use. Meanwhile, the 42-mile range that comes courtesy of its PHEV powertrain qualifies it for the 8% tax banding.
Peugeot 3008 Review
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Ford Kuga
The Ford Kuga 2.5 Duratec PHEV can’t quite match the Peugeot for zero-emission range, but its figure of 41 miles is still good enough to beat the taxman and qualify it for the 8% BIK rate. It’s arguably not a match for the Peugeot on style or quality, either, but it’s just as practical and family-friendly and comes with a good amount of kit as standard. Where the Ford has the measure of its French foe, however, is on the driving experience. The Peugeot is good, but the Ford is great, combining a supple ride and strong performance with nimble handling and sharp steering. The fact that it’s also saving you a few quid will only make you smile even wider.
Ford Kuga Review
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All figures correct at the time of publication, but are subject to regular changes and so should be checked independently. If you ever need to make a complaint about your lender, contract hire provider, credit broker, or car leasing company, get in touch with the Financial Conduct Authority