Business car finance Ireland: company cars on HP or lease

Yes. A limited company can finance a car on hire purchase, a finance lease or contract hire, with the company as the borrower and the car registered in its name. Lenders look at your accounts and bank statements and may ask a director for a personal guarantee. If a director buys a car personally, that is consumer finance, which Welcome Finance cannot help with.

Because Irish VAT law blocks deduction on most passenger cars. The main relief allows 20% of the VAT on a qualifying car: first registered from 2021 with CO2 below 140g/km and used at least 60% for business. On a lease, 20% of the VAT on each monthly charge can be deducted under the same conditions. Motor dealers and car-hire businesses have their own rules.

It depends on the car, the mileage and your tax position. Buying on hire purchase gives the company the car at the end and capital allowances within the limits. A finance lease or contract hire spreads the cost, and contract hire can fix maintenance costs but sets mileage limits. Lease payments on cars are restricted for tax in a similar way to capital allowances.

Allowances are 12.5% a year over eight years, on a cost capped at €24,000 and scaled by CO2. For cars bought before 2027, cars up to 140g/km get allowances on the full €24,000, cars over 140g/km up to 155g/km on the lower of €12,000 or half the cost, and cars above 155g/km get none. From 1 January 2027, the full amount applies only up to 120g/km.

BIK is a percentage of the car's original market value, after a €10,000 reduction for most cars. The rate depends on CO2 and business mileage. Up to 26,000 business kilometres, it runs from 15% for a zero-emission car to 37.5% for cars over 179g/km, and it falls in steps as business mileage rises. The employer collects the tax through payroll.

In 2026, usually yes. Electric cars get the 15% rate at low business mileage and an extra €20,000 reduction in their original market value on top of the €10,000 general reduction. Revenue says the extra electric reduction falls to €10,000 in 2027 and ends in 2028, when the general reduction falls to €2,500. BIK on an electric car will therefore rise over the next two years.

Not usually. SEAI's car grant is for privately bought cars, which must stay registered as private for six months, and its table shows no commercial grant for passenger cars. Companies still benefit from VRT relief of up to €5,000 on electric cars, which Budget 2027 extended to the end of 2028, and the price limits apply. Electric vans bought by companies can get an SEAI grant.

Sometimes, but PCP is mainly sold to consumers. A few lenders offer business versions, with lower monthly payments and a guaranteed final value you can pay, hand back or trade in. For companies, hire purchase, finance leases and contract hire are more common. Compare the total cost, the mileage limit and the final payment before choosing.

Possibly. Revenue's energy-efficient equipment scheme includes electric and alternative fuel vehicles, giving a 100% first-year allowance on vehicles your company owns, but for cars it is based on the lower of the actual cost or €24,000. Leased cars do not qualify, and a car can use only one allowance scheme. Your accountant can confirm whether a specific model qualifies.

Possibly. Car dealers often have finance partners, and banks and leasing companies lend directly. Tell us what your company needs and we'll tell you honestly whether our panel can help, or where to apply instead.