\ud83d\udd11 Key finding<\/span><\/p>\n 2026. In 2010, the most effective way to manage corporate mobility and optimise costs is through strategic full-service leasing for hybrid vehicles (PHEVs), which can help combine tax incentives with low total cost of ownership (TCO).<\/span><\/p>\n Read on to find out how MyAvis solutions can help you achieve your ESG goals. <\/span><\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n <\/p>\n In this article, we will analyse why full-service car leasing in the hybrid segment has become a common business standard in Latvia.<\/span><\/p>\n With more than 30 years of experience in the Latvian market, MyAvis helps companies navigate the complex tax and technology environment on a daily basis. By choosing the right solutions, companies can gain benefits ranging from the optimisation of their RTGS to the peace of mind that full-service operations can bring. <\/span><\/p>\n Switching to hybrid cars can be an important step towards a greener future. Individual results and savings may vary depending on the specifics of the fleet. <\/span><\/p>\n Contents<\/span><\/p>\n <\/p>\n Hybrid cars, especially plug-in hybrids or PHEVs, are becoming standard in company fleets as they can offer flexibility between urban electric and inter-city travel while potentially significantly reducing a company’s CO2 footprint. <\/span><\/p>\n Detailed analysis of sustainability data for the Latvian market<\/span><\/a>which examines the transition to electrified transport, researchers found that switching to a hybrid or electric fleet can reduce CO2e emissions by around 35-40% in Latvian conditions[1]. <\/span> <\/p>\n Such a green fleet can help a company not only to build its corporate reputation, but also to prepare for stricter requirements in the future.<\/span><\/p>\n Corporate mobility today is closely linked to environmental, social responsibility and governance (ESG) objectives. According to <\/span>European Commission’s Corporate Sustainability Reporting Directive (CSRD)<\/span><\/a>, larger companies are required to start reporting “Scope 3” emissions, which include their transport-related carbon footprint[2]. <\/span> <\/p>\n This means that ESG targets and corporate mobility are no longer inseparable concepts, and the decarbonisation of the fleet is becoming an essential priority. The integration of hybrid cars can serve as an effective transition phase to help companies gradually adapt to these requirements. <\/span><\/p>\n Car financing and strategic refurbishment can make this process much easier by reducing the initial capital burden.<\/span><\/p>\n Moreover, looking at market trends, companies are increasingly focusing on the total cost of ownership (TCO) rather than just the initial purchase price. <\/span><\/p>\n Hybrid car technology can help optimise everyday costs, especially if employees regularly make short journeys within city limits where the full benefits of an electric motor can be exploited. <\/span><\/p>\n While the initial cost may seem higher, in the long run lower taxes and reduced fuel consumption can bring significant financial benefits. By planning routes properly and providing charging facilities in the office or at employees’ homes, companies can maximise the benefits of hybrid technology. <\/span><\/p>\n Image from pexels.com<\/span><\/p>\n The main difference between these models is the delegation of risks – <\/span>full-service car leasing<\/span><\/a> can help protect a business from unpredictable battery maintenance costs and sharp drops in residual values. <\/span> <\/p>\n Buying a classic car and keeping it on the company’s balance sheet often means that all the risks associated with maintaining, repairing and reselling the vehicle are borne by the owner. <\/span><\/p>\n In contrast, full-service leasing allows a company to pay only for the use of a car for a set period of time, transferring the risks of resale and technological obsolescence to the service provider.<\/span><\/p>\n Risk management has become particularly important today. Technology is advancing so fast that a fixed future value serves as a safety net for a company’s finances. <\/span>Global asset finance company study<\/span><\/a> shows that full-service leasing can serve as a safety net against sharp fluctuations in residual values in the hybrid and electric car segment[3]. <\/span> <\/p>\n This residual value risk is one of the main reasons why companies choose to move away from the classic concept of ownership. <\/span><\/p>\n By choosing professional fleet management services, companies can plan their cash flow more accurately and avoid unexpected expenses.<\/span><\/p>\n In addition to mitigating risks, full-service leasing includes all necessary day-to-day maintenance costs in one fixed monthly payment. <\/span><\/p>\n According to <\/span>Data from the European Leasing Industry Representation<\/span><\/a>, maintenance costs for electric and hybrid vehicles can be around 30-50% lower than for internal combustion engine (ICE) vehicles[4]. <\/span> <\/p>\n This means that by integrating hybrid cars into its fleet through such a model, a company can not only reduce its administrative burden, but also potentially optimise its overall operating costs. <\/span><\/p>\n This approach can help company management to focus on their core business, leaving the technical and financial issues of mobility to experts in the field.<\/span><\/p>\n Latvian legislation in 2026 continues to support low-carbon transport through differentiated tax rates, which can bring significant financial savings for companies. Company car tax 2026 The new car choice scheme for 2010 is structured to encourage more environmentally friendly car choices. <\/span><\/p>\n In the official information of the tax administrator<\/span><\/a> states that from 2025, the rates of the Vehicle Exploitation Tax (TEN) will increase by around 10%, but for hybrids they are graduated according to CO2 emissions[5]. <\/span> <\/p>\n This means that vehicles with lower emissions can have a significantly lower tax burden.<\/span><\/p>\n The deduction of VAT on cars is also an important aspect. Under the current rules, companies can deduct 50% of the input VAT on the purchase, lease and maintenance costs of hybrid cars. <\/span><\/p>\n If the vehicle is used exclusively for business purposes and is properly documented, full deduction of VAT may be possible in certain cases. <\/span><\/p>\n However, it is always important to take into account the threshold for a representative car, which is currently set at \u20ac75,000 + VAT. <\/span><\/p>\n Cars worth more than this amount may be subject to different tax deduction rules. Individual tax savings may vary depending on the specifics of a company’s business and accounting policies. <\/span><\/p>\n To better understand potential savings and plan budgets, businesses may find it useful to familiarise themselves with current <\/span>price list of services<\/span><\/a>which helps to clearly estimate all costs related to car maintenance. <\/span> <\/p>\n\n
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Why are hybrid cars the business standard in 2026? <\/strong><\/h2>\n
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<\/p>\nFull-service car leasing versus classic car ownership<\/strong><\/h2>\n
Financial benefits: deduction of UVTN and VAT<\/strong><\/h2>\n
Table 1: Tax comparison in 2026 (Indicative) <\/strong><\/h3>\n
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