leasing a car - dumb questions

[petemurphy]

never looked at leasing as never understood it but now in the market for a more boring car thanks to baby so looking at golfs.

basic questions:

is it a case of a deposit followed by set sum each month then u give the car back at the end?
what if you want to change cars half way through?
how do u start going through the millions of leasiing companies there seems to be? are they all the same is it a question of just who is cheaper?
is it better to go through the manufacturer ie vw here?
is it better to run it through the business rather than privately?( i have a ltd company )
any downside?

Thanks! sorry for the virgin leasing questions!

[rfoster]

petemurphy said:

never looked at leasing as never understood it but now in the market for a more boring car thanks to baby so looking at golfs.

basic questions:

is it a case of a deposit followed by set sum each month then u give the car back at the end?
what if you want to change cars half way through?
how do u start going through the millions of leasiing companies there seems to be? are they all the same is it a question of just who is cheaper?
is it better to go through the manufacturer ie vw here?
is it better to run it through the business rather than privately?( i have a ltd company )
any downside?

Thanks! sorry for the virgin leasing questions!

Basic answers. Yes, it's just a case of deposit (initial rental) followed by monthly rentals thereafter and you hand the car back at the end. All leasing companies (myself included) tend to use the same actual finance companies, these are sometimes the manufacturer's own products or one of the big leasing companies such as Lex Autolease / Arval and the like. some of the manufacturers (VW Group most specifically) don't offer 'personal' contract hire so you would have to put this through your company.

If you want to change the car halfway through this can be quite expensive - most of the leasing companies will expect a termination figure and generally this is around 50% of the remaining payments. So bear that in mind before you make any decisions. If you went down a route such as hire purchase / PCP then it's considerably easier to change vehicles during the agreement - you have the equity in the vehicle to offset against the settlement figure.

Whether it's best to take the vehicle through your company or personally depends greatly on the specific car you decide to go for. If you put one through the company then you would be personally liable for company car tax, for example; very cheap on a Golf Bluemotion but extremely expensive on a Range Rover. Most of the finance companies can give you a comparison for whether it's best for you to go privately or through the business.

Hope this helps - any queries then I'm happy to answer.

Cheers, Richard

[petemurphy]

Cool thanks appreciate it

[Toro Rosso]

Clearly it will depend on your circumstances (both the company and you personally), but generally when asked this question by our client's it always works out cheaper to run a car from private funds when all aspects are considered. HMRC does not like cars, especially exciting ones!

This is when comparing like with like, if you can get better deals as a business customer it may help to tip the scales towards company ownership.

[CaptainSlow]

Many of your answers can only be answered with "depends".

There are many different types of lease arrangements and they are have different intricacies.

Also, remember that just because a monthly rental is lower with one lessor it doesn't mean it is cheaper!!

[MrOrange]

Yup. Handback costs can be silly as some companies can get quite fussy about condition. My company handed back a Seat that was mint aside from a 5 scratch on the rear px door. Booked to do 36k it went back with only 21k and still they charged £180 for "prepping and painting" the door.

[miln0039]

CaptainSlow said:

Many of your answers can only be answered with "depends".

You can't answer answers.

[Mandat]

Toro Rosso said:

Clearly it will depend on your circumstances (both the company and you personally), but generally when asked this question by our client's it always works out cheaper to run a car from private funds when all aspects are considered. HMRC does not like cars, especially exciting ones!

This is when comparing like with like, if you can get better deals as a business customer it may help to tip the scales towards company ownership.

Would HMRC take a dim view of someone signing up to a business lease (via their Ltd company) and then paying the actual leasing costs from private funds. That way, there would be no BIK implications as the Ltd compnay are not paying out any money?

[CaptainSlow]

miln0039 said:

You can't answer answers.

I just have.

[Toro Rosso]

Mandat said:

Toro Rosso said:

Clearly it will depend on your circumstances (both the company and you personally), but generally when asked this question by our client's it always works out cheaper to run a car from private funds when all aspects are considered. HMRC does not like cars, especially exciting ones!

This is when comparing like with like, if you can get better deals as a business customer it may help to tip the scales towards company ownership.

Would HMRC take a dim view of someone signing up to a business lease (via their Ltd company) and then paying the actual leasing costs from private funds. That way, there would be no BIK implications as the Ltd compnay are not paying out any money?

BIK rules still apply, the company owns the vehicle and it is being made available to an employee. However I think the contributions made by the employee can be set against this provided certain conditions are met (a firm, contractual requirement to make the contribution being one of them).