Realising the dream of owning
and maintaining can seem daunting. Here at Specialist
Cars of Malton, we aim to help you make the best
decision based on your circumstances. Naturally
we can only give examples so we ask you to complete
the form at the bottom of the page if you would
like a specific quotation.
We have access to the UK's best
finance brokers. We are confident that we can
find you a best deal quote, (in many cases even
if the car is purchased elsewhere!)
Call immediately or click here
but we do advise you at least look at the other
options available, you could save more than you
think!
HIRE
PURCHASE
Hire purchase is a simple and
popular way of purchasing a vehicle, with worthwhile
tax advantages for businesses. If ownership is
a priority, this is an extremely cost effective
method of borrowing.
CASHFLOW BENEFITS
Paying an initial deposit, calculated
as a percentage of the total cost this is followed
by fixed monthly repayments; which allows you
to budget monthly expenditure precisely in advance.
TAX IMPLICATIONS
Business users may claim tax relief
on the interest charged. The vehicle is also classified
as an asset, which allows it to be written down
against taxable profits by 25% or £3000
(maximum per annum).
WHO OWNS THE VEHICLE AT THE
END OF THE AGREEMENT
At the end of the agreement, which
may be from 1 to 5 years, you become the outright
owner of the vehicle
LEASE PURCHASE
This is similar to
hire purchase but has greater flexibility.
CASHFLOW BENEFITS
The initial deposit is normally
expressed as monthly payments in advance and is
much lower than traditional HP, and a final lump
sum or balloon payment (sometimes called a residual
value) is usually included. This has the effect
of reducing the amount of the monthly payments,
aiding cash flow.
TAX IMPLICATIONS
The tax and financial benefits
are the same as hire purchase, but the payments
can be structured to suit a businesses particular
cash flow needs.
WHO OWNS THE VEHICLE AT THE END OF THE AGREEMENT
After making the balloon payment,
ownership of the vehicle can be taken, or it can
be part exchanged - using any surplus equity towards
a deposit for a new vehicle.
Finance leasing
can be one of the
most cost effective options, if you need full
use of a vehicle for minimum outlay but do not
require final ownership.
CASHFLOW BENEFITS
By leasing your vehicle valuable
savings can be made. A finance lease can be extremely
flexible. Rentals can be paid monthly, quarterly
or annually throughout the lease period (usually
2 to 5 years). The initial deposit is normally
expressed as monthly rentals in advance and a
final lump sum balloon payment (sometimes called
a residual value) is usually included. This has
the effect of reducing the amount of the monthly
rental, aiding cash flow
TAX IMPLICATIONS
The rentals can be offset against
taxable profits. If you are VAT registered, 100%
of the VAT payable on the rentals can be reclaimed
for any commercial vehicle or car used exclusively
for business purposes. 50% of the VAT can be reclaimed
for a car used for both business and private mileage.
WHO OWNS THE VEHICLE AT THE
END OF THE AGREEMENT
At the end of the lease the vehicle
is sold and the sale proceeds (less a nominal
sum) are refunded to you as a rebate of rentals,
which attract VAT. Due to its low initial outlay,
fixed costs throughout the rental period, excellent
tax efficiency and flexibility, finance lease
is favoured by many business users
Personal contract purchase
(PCP) is a new product developed to enable individuals
to finance their vehicle whilst still retaining
some or all of the benefits associated with a
company car. As the agreement is written in your
name the normal "benefit in kind tax liability"
doesn't apply. This facility can also be offered
to those employees not normally entitled to a
company car. Low deposit followed by a fixed monthly
charge means that it is easy to budget for and
it is possible to provide all-inclusive maintenance
and breakdown packages.
WHO OWNS THE VEHICLE AT THE
END OF THE AGREEMENT
The vehicle is supplied for a
set period of time at a fixed rental. At the end
of the agreement the driver may purchase the vehicle
by paying the balloon payment (guaranteed future
value) or simply return it to the finance company.
Contract purchase This option
is similar to lease purchase but with even greater
flexibility. It is designed to give all the operational
benefits of contract hire including maintenance,
Road Fund Licence and relief vehicle, without
the VAT implications of a lease. It therefore
appeals to professions and businesses that are
not VAT registered, and individuals who wish to
opt out of their company car scheme.
CASHFLOW BENEFITS
The
initial deposit is normally expressed as monthly
payments in advance and is followed by fixed monthly
payments, you know exactly what your monthly motoring
costs will be.
TAX
IMPLICATIONS
The tax
and financial benefits are the same as lease purchase
or hire purchase.
WHO
OWNS THE VEHICLE AT THE END OF THE AGREEMENT
The
final balloon payment is a guaranteed future value.
You have the option of either taking ownership,
disposing of the vehicle yourself (if you wish
to take advantage of a profit opportunity) or
simply returning the vehicle to the finance
