Leasing a Car V's Buying a Car in the UK

I drive a Peugeot 306 XL 1995 with 120,000 miles on the clock. I'm quite happy with the old bugger and I would drive it till the axels fall off, but I'm getting stick from all sides to upgrade.

Believe it or not I cannot afford to go out and buy a new car for cash (to be honest I can't even afford to buy a wheelbarrow for cash) so my options are to get a loan or lease. The last time I was in the market for a car was 1995 and I haven't got a clue where to start; a quick search on the net throws up tons of information but I really don't know where to begin and am looking for some guidance.

Regards,
Simon

Simon,

I know where you are coming form, I drive a 106 with a cracked compression head, OK in the summer but it will not start when the weather gets cold!!
Once it starts it goes on forever, all with one tank of diesel, but its just getting it started!

Everyone keeps telling me to get a new one, but its not as easy as that, I love my car, OK its temperamental on cold mornings, but who isn't?

If you like your car, stick with it!!

Nadine

If you like your car, stick with it!!

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A large slice of me agrees with you Nadine. I suppose I'd only have to wash a new one.

I will post a photograph to show you what they mean.

Regards,
Simon

I will post a photograph to show you what they mean.

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Car__good_side.jpg   132.99KB   74 downloads
Comments?

Regards,
Simon

Simon.

Keep the Pug and get a loan to widen the entrance to your driveway !

I had an old 306 and succumbed to the charms of a new car, still miss the old thing .

Martin.

Simon,

The car still looks damn good but if you should consider buying a new car, I am not sure of the Income Tax Law in your country but over where I come from, I would buy or lease a new car and have it placed in my name (for road tax purposes - if there is a difference between personal and corporate in UK) / an agreement between myself and the company holding in custody on behalf should do the trick).

3- 5 years later (depending on the approved amortizing rate), the company hives it off to me at depreciated value (normally for a nomical value of 1 dollar).

The loophole here is that you get to drive the car all the while, enjoy the tax rebate and gets to buy the car for a song later...........and sell it off for a "tax-free profit" if you should wish to sell it off.

Do this method work for you?

Is all legal!
Charles Chew

Keep the Pug and get a loan to widen the entrance to your driveway !

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I think you could be right mate; the more experienced I become the worse I seem to be getting.

The car still looks damn good but if you should consider buying a new car, I am not sure of the Income Tax Law in your country but over where I come from, I would buy or lease a new car and have it placed in my name (for road tax purposes - if there is a difference between personal and corporate in UK) / an agreement between myself and the company holding in custody on behalf should do the trick).  3- 5 years later (depending on the approved amortizing rate), the company hives it off to me at depreciated value (normally for a nomical value of 1 dollar).

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Sounds good Charles; I'm not sure but I think if you have a company car over here you have to pay more personal income tax - I will check with my accountant - he'll know.

Regards,
Simon

Simon,

Charles is spot on - the same arrangements can take place here. If you are VAT registered you instantly get 17.5% off the purchase price. Your company tax burden will be offset by the depreciation allowance of the vehicle & loan interest costs .

There is a personal tax liability which will vary dependent on the cost and environmental efficiency of the car you choose. A rough guide would be £1500-£2500 per year.

Note there is a category of vehicle where this is significantly reduced i.e. vans - there is a fixed much smaller liability on this. The interesting thing is that the definition of a van does not exclude many main stream cars - if you have ever seen a landrover without back windows - someone is getting a luxury car in a very tax efficient way.

If you were to purchase a car with removable seats - the tax man is not going to know exactly what you are using the car for (your accountant will be able to fill you in on the details).

If you dont want to buy a vehicle through the company, you can get some money back by you charging your company for business miles, the revenue has set rates allowable but if you are buying a new vehicle I would stongly recommend doing it through the company.

Hope this helps

Rich

I'm not very streetwise when it comes to tax...erm...enhancement. In this case it looks like there could be some; I really do do need to see my accountant sharpish.

Thanks Rich.

Regards,
Simon

Simon,
Better still, go on corporate lease financing and charge the depreciation (should be based on accelerated amortization rate) and charge against your taxable profits sooner than you wish all this while...........then do the hive off

Hey! the accountant does not tell you all these for free.......humm! wonder if they know how to go about it

Income Revenue Dept ......

Charles Chew

Better still, go on corporate lease financing and charge the depreciation (should be based on accelerated amortization rate) and charge against your taxable profits sooner than you wish all this while...........then do the hive off          

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Charles you really are multi talented.

Regards,
Simon