Contract Lease Hire

BlizzardX · 22 Mar 2007 at 19:06

Hey Guys,

I'm in need of a new car as my current one's engine will go bang in the next few months I think. I've found out that as I have a limited company I can claim the costs of running a lease car back through the company and infact pay nothing for a new car, aslong as it doesn't cost more than 30% of my total invoicing for the year.

This effectively means I have £1200 a month to play with on a lease car, but only £600-700 is available for the car itself as the rest is taken up with fuel.

Firstly, I need to know about decent leasing firms. I found one, concept leasing, who gave me a quote on a car as an example. Can people name some decent ones for me? I'm looking at a 2 year lease as I'm likely to be emigrating to New Zealand in about 2 years.

Secondly, the car itself. I'm looking for something that is comfortable, quick (don't have to worry about fuel), attractive as a car goes, pretty well specced, or can be and is a saloon.. I cover upwards of 100 miles a day on various sorts of roads from the M25 to a few country roads to get in to Harlow, Essex. I've got my eye on a BMW/Audi... I do like the newer Volvos but I think my gf would kill me if I got another one! Preferably the cost should be less than £500 a month really. So basically, any ideas for a decent attractive cruiser, that handles well and has a bit of speed (current car is a volvo S40 1.9TD with a whole 95BHP to its name).

Sone · 22 Mar 2007 at 19:16

Old man got a very good deal on a bottom of the range Audi A6 2.0Tdi SE. Think its £300 a month but with big first payment works out a little more ober the lease.

S40's are always going cheap on leases, maybe worth a look if you can get the gf to have one. The old man had the same problem his wife hates em

BlizzardX · 23 Mar 2007 at 06:47

Does anybody know of any decent contract hire firms that are reputable?

wonder_lander · 23 Mar 2007 at 08:23

http://www.swap-a-lease.co.uk/ for people who are fed up of their lease or are going to go over their mileage allowances.

Phil W, works/worked for a leasing company

Vertigo · 23 Mar 2007 at 08:25

Mine was sourced from here with no problems at all:

http://www.prestige-car-leasing.co.uk/

BlizzardX · 23 Mar 2007 at 08:37

Thanks Vertigo, just the sort of thing I was after. Can I ask what car you have, spec and how much it costs per month?

aMb · 23 Mar 2007 at 08:43

BMW do their own leasing, can sometimes work out the cheapest depending on circumstances.

lozza23_uk · 23 Mar 2007 at 08:47

well your still going to have to pay for it?
your own ltd company = you work you get paid = you pay for the car.

what are the benefits of having a LEASED car under a ltd company. where is there tax to be saved?

interested in this because my ltd will be running as of april.

BlizzardX · 23 Mar 2007 at 08:52

lozza23_uk said:
well your still going to have to pay for it?
your own ltd company = you work you get paid = you pay for the car.

what are the benefits of having a LEASED car under a ltd company. where is there tax to be saved?

interested in this because my ltd will be running as of april.

I will have to pay for it out of my own account to start with and then each month I claim back the total cost of the car as its required for me to carry out my business. Its a corporation tax reduction which covers the cost of the expenses.

The benefits are this:

If I continue to work and submit invoices to my accounts each week, I can continue to claim back the costs of my fuel, expenses, subsistance along with the car. I therefore can get a brand new car, without the hassle of me owning it for a set time and not worry about anything apart from becoming unemployed.

blueboy2001 · 23 Mar 2007 at 12:35

You've forgotten one pretty fundamental point - you will personally be liable for Benefit in Kind tax as you are being provided with a company car by a limited company as you are an employee of that company (owner/directors/company secretary or whatever are effectively employees).

I'm slightly confused as to how you are planning to work this though - if you are going to lease the car personally then you will be liable for VAT - unless you can get the VAT back (well, a proportion of it) then whenever I've looked leasing has provided almost no financial advantage over owning the car. The maximum you can claim as an expense is 40p per mile, anything above that you would be personally taxed on yourself.

If you haven't been trading long, haven't got audited accounts (or a proper accountant) etc then you will struggle to get decent prices from a lot of firms.

Phil W · 23 Mar 2007 at 12:38

I worked for 2.

http://www.centralcontracts.com is the more successful and reputable of the two.

/edit and £500 a month will get you a LOT of car.

BlizzardX · 23 Mar 2007 at 12:50

blueboy2001 said:
You've forgotten one pretty fundamental point - you will personally be liable for Benefit in Kind tax as you are being provided with a company car by a limited company as you are an employee of that company (owner/directors/company secretary or whatever are effectively employees).

I'm slightly confused as to how you are planning to work this though - if you are going to lease the car personally then you will be liable for VAT - unless you can get the VAT back (well, a proportion of it) then whenever I've looked leasing has provided almost no financial advantage over owning the car. The maximum you can claim as an expense is 40p per mile, anything above that you would be personally taxed on yourself.

If you haven't been trading long, haven't got audited accounts (or a proper accountant) etc then you will struggle to get decent prices from a lot of firms.

Basically I'm a contract worker in the Civil Engineering industry who has a limited company to essentially get paid more money but with risk. My limited company is managed by a very large organisation that deals specifically with these limited companies, and the only person in the company is me. 1st contact, are my company secretary, registered office and also my accounts and financial advisors. This was not a whim to try and get a cheap car, i have thoroughly researched the whole tax side of things. My accounts have stated unilatterally that I will not suffer any tax on the use of the vehicle as without it i would not be able to do my job, my own personal milage will be so small in comparison it won't actually matter.

Now I believe that I could suffer some form of tax on it and I will make sure I have some money set aside to cope, but as I said my accounts who answer this sort of question for many of their clients (they sell these limited company products every day) and as I said that i wont suffer any tax.

Phil W · 23 Mar 2007 at 12:51

Give the above a call and see what they can do, that would be my first port of call anyway

BlizzardX · 23 Mar 2007 at 13:06

Thanks Phil, will do.

Vertigo · 23 Mar 2007 at 13:11

BlizzardX said:
Thanks Vertigo, just the sort of thing I was after. Can I ask what car you have, spec and how much it costs per month?

Audi A3 with £4.5k of options, total list price is £26.5k, costing around £430-ish ex-vat per month, fully maintained on 15k miles pa.

It's the options that whack the price up as lease companies attach no residual value to them at all, so you're effectively paying for them outright over the term of the lease. You therefore need to get the best spec you can before adding options to keep the price down. When I was scouting about for the best deal, a couple of the companies specifically asked me about the options and whether I realised how much they'd put the price up by. They get loads of people who sound keen but then add a few grand of options and are shocked when the price goes through the roof, thus wasting the salesman's time.

Other major factors are maintained or non-maintained (although this typically only adds about £30-40 a month onto the price and is thus well worth it imo, and also what annual mileage you're going to do. Most of the headline-grabbing figures the lease companies put about are for 10k miles non-maintained, or some such useless figure. As soon as you add more miles, maintenance and some options the price starts rising.

BlizzardX · 23 Mar 2007 at 14:12

hmmm... so effectively im better of choosing a higher spec engine with more stuff as standard and keep the extras as low as poss to reduce the cost? i.e. a 325i with loads of extras could end up costing more than a 330i with minimal extras?

How easy was yours to sort vertigo? Simple matter of signing the contract and waiting for delivery?

Phil W · 23 Mar 2007 at 14:17

http://cars.centralcontracts.com/616-Volvo-25

Free servicing on these Ovlovs

(yes i did spell it like that)

BlizzardX · 23 Mar 2007 at 14:19

haha I dont particularly want a new volvo, my last 2 have been volvos so fancy a change!

Vertigo · 23 Mar 2007 at 14:59

BlizzardX said:
hmmm... so effectively im better of choosing a higher spec engine with more stuff as standard and keep the extras as low as poss to reduce the cost? i.e. a 325i with loads of extras could end up costing more than a 330i with minimal extras?

Yep, pretty much. Prestige marques like BMW/Audi will shed around half of their value over three years and this is factored into the lease price so something which is an option on a "lesser" model but standard on a "higher" one would effectively cost you half as much on the higher model.

How easy was yours to sort vertigo? Simple matter of signing the contract and waiting for delivery?

Very straighforward. Did most of my dealings with them via email which entailed a lot of re-quoting as I changed my mind about options until I arrived at the final spec then they turn the final quote into a proper order and sort the final details such as colour and which no-cost options you want. They will need a copy of your most recent audited accounts just to satisfy themselves that you can afford the payments and aren't going to do a runner with the car and then the factory order goes in and it's just a case of waiting for it to be built and delivered.

BlizzardX · 23 Mar 2007 at 15:30

Hmmm... I noticed one thing and that is that I will be paying the money for the car out of my own pocket and then claiming the costs back each month. It is for my business but would a firm take this as a Personal or Business Hire?