Business leasing

[GQuigley67]

Anyone lease any cars through their business or vans? Looking into leasing a car through my business but would like to have others insured on it for personal use also, is it better to buy or lease?

Also having to upgradd my van to a bigger one, would leasing be better than buying? Amd can you rack out the back of leased vans?

 

[Atouchofgas]

Car and van, van is racked and sign written, just have to get written permission. Car accountant usually just asks how many personal mileage and deducts etc

 

[Ray Stafford]

Leasing is fine, so long as you understand how it works.

As a customer, it feels like leasing companies make their profit by charging you at lease-end for 101 things. So be absolutely sure that you have the service history complete, every single removable item (like jack, wheelnut thingy etc) because they will charge you disproportionately if they are missing. Don't think that the cracked light cover is a minor item - they will charge you £400 + VAT for it. GET IT FIXED.

And avoid doing any bodywork repairs (unless bare metal is exposed) until just before you hand it back. All scrapes and light scratches will be treated like major impact damage.

 

[Nostrum]

Ray, have you ever managed (or tried) to purchase a veichle at the end of the lease? I'm wondering if I can do this.

 

[Ray Stafford]

Ray, have you ever managed (or tried) to purchase a veichle at the end of the lease? I'm wondering if I can do this.

Yes, I have bought loads Sam, but none recently. It used to be that you could get really good deals at the end of a lease, and it was a way of minimising losses if you have gone way over mileage (avoids the penalty) or getting the benefit if the vehicle was well under mileage.

However, in the last few years, the leasing companies seem to have wised up. I reckon this is because they make such a profit out of end-of-lease charges, which don't apply if you buy the vehicle yourself.

 

[GQuigley67]

I've been doing a lot of research on it and it seems a good way to go but things aren't that clear online, I've asked for a call back on Tuesday but seeing my accountant on Monday will ask a few questions also. I really need to upgrade my van this week it's jam packed and a nightmare to work with. If I were to lease a van and car from the same company would that be considered a fleet and would there be any discounts?

 

[GQuigley67]

Also if you wanted to upgrade to a new car after the 2 years do you need to pay the upfront payment again?

 

[Leo21]

You have to be vat registered as well imho.

 

[Ray Stafford]

If I were to lease a van and car from the same company would that be considered a fleet and would there be any discounts?

I can't speak for all manufacturers, but we have lots of citroens and mercs. The most important factor in getting a good price is whether the dealer is on target or not. There can be advantages to waiting until the quarter end (ie last weeks of March, June, Sept and Dec) because if they need a few sales to get over a rebate threshhold they may do you a really good deal. On the other hand, if they have already made target, they won't.

I dunno whether I am just losing my touch, but it seems harder to get a deal these days.

 

[stevetheplumber]

in many ways the days of making deals are over salesmen are a dying breed let the computer fix the price and you can let anyone be the face
computer says no scenarios

 

[Ray Stafford]

Also if you wanted to upgrade to a new car after the 2 years do you need to pay the upfront payment again?

It depends. With Citroen contract motoring, after a while we got a deal where there was no up-front - just pay the first month rental. But that was after doing quite a lot of vehicles with them.

 

[Chalked]

Had a word with my accountant yesterday regarding buying a new van. She said this.

This is based on a brand new transit at about £20,000 + vat

Best option. If you have the cash, buy it outright. Claim full tax depreciation in the fist year.
Next best. Put as much cash in as you can, then get the cheapest finance. Again claim full tax depreciation in the first year.
Both of the above will become an asset after paying off.

Next best ( or worst) Lease. Pay monthly. Goes into profit and loss account. So comes straight off profit. Pitfalls are, the van needs to be kept within your milage agreements and tidy. You will get charged for any .

Taking out all tax benefits, here's my thoughts.on the same van. £20,000 cost and let's say it's worth £10,000 in four years. I have not included vat in these calcs.

Pay cash . four years later it had cost you
Depreciation. £10,000
Interest you would have got on £20,000. £120
Total £10,120 divided by 4 (years) = £2620 per year true cost.

Pay £10,000 deposit ( old van and some cash) and rest on finance.
Depreciation. £10,000
Interest lost. £60.
Finance interest. £780. ( based on 3.8%)
Loan set up cost. £150
Total. £10,990 cost per year £2747

Lease
based on 15000 miles £2250 payment upfrontthen £219 a month for 60 months
Cost. Deposit £ 2250
Rentals. £13,140
Total. £15,390 cost per year £3847

So in conclusion it will cos over a £1000 more a year to lease !

 

[Leo21]

Wish you'd have just put the last sentence in.

 

[stevetheplumber]

Had a word with my accountant yesterday regarding buying a new van. She said this.

This is based on a brand new transit at about £20,000 + vat

Best option. If you have the cash, buy it outright. Claim full tax depreciation in the fist year.
Next best. Put as much cash in as you can, then get the cheapest finance. Again claim full tax depreciation in the first year.
Both of the above will become an asset after paying off.

Next best ( or worst) Lease. Pay monthly. Goes into profit and loss account. So comes straight off profit. Pitfalls are, the van needs to be kept within your milage agreements and tidy. You will get charged for any .

Taking out all tax benefits, here's my thoughts.on the same van. £20,000 cost and let's say it's worth £10,000 in four years. I have not included vat in these calcs.

Pay cash . four years later it had cost you
Depreciation. £10,000
Interest you would have got on £20,000. £120
Total £10,120 divided by 4 (years) = £2620 per year true cost.

Pay £10,000 deposit ( old van and some cash) and rest on finance.
Depreciation. £10,000
Interest lost. £60.
Finance interest. £780. ( based on 3.8%)
Loan set up cost. £150
Total. £10,990 cost per year £2747

Lease
based on 15000 miles £2250 payment upfrontthen £219 a month for 60 months
Cost. Deposit £ 2250
Rentals. £13,140
Total. £15,390 cost per year £3847

So in conclusion it will cos over a £1000 more a year to lease !

and there is the lease companies profit which is why in my mind leasing must always be more expensive all though there are also tax to consider

 

[Ray Stafford]

That a good analysis from Chalked, but there are two other things to consider.

1) The maths only stands up if you not only have the cash, but you have no other debt which might be paid down, and no more profitable use to put the cash to. For example, if you have only a few thousand in credit card or store-card debt, then you would be much better to use your cash to pay that off, and to move your debt over to the vehicle. Since the latter is asset-backed, it will almost certainly be at lower interest rates. Similarly, if your business needs cash to grow (for example to finance some larger jobs, or acquire some specialist tools) then again its probably more effective to utilise your cash for that purpose.

2) On the other side of the coin, if you do have the free cash, then don't under estimate the bargains to be had in the pre-registered, demonstrator or 12 month old market. Its much easier to screw deals in this area if you have hard cash all ready to close.

 

[hammers4spanner]

You lot are getting shocking lease deals if thats what your getting you can get them now where they give you your yearly service, several valets a year plus any repairs all included in lease.

Also if you look like your going to go past your mileage you just pass van in for another no obligation s

 

[missplumb]

we are due to change our vehicles in august, currently have 12 plate primastar on lease with 82000 miles from new and a 12 plate navarra with 65000 miles from new. both well over the mileage allowance. boss has hinted that my van will go back and we will look at getting the Mitsubishi Outlander commercial hybrid as the benefits-in-kind tax is alot lower, and the boss wants a vw amorok to replace his navarra - gonna be expensive month!!

 

[Fallon1982]

What lease companies are you guys using, just out of interest? Any recommendations or are they all fairly similar on there deals?

 

[JWLPlumbing]

Interested on this also, I have a couple of guys working for me now and we have 3x Transporter vans - mine is a LWB and other 2 are SWB. All well over 100k now.

As it happens I am in process of getting a lease on a personal car which arrives next week