help with finance please

[Maz]

Hey thats not true, the student loan only paid for the insurance

He wont be VAT registered, he'd probably have a bit more idea what he was doing if he was VAT registered.

True, or have a decent accountant.

Interest payable on any secured loan for purposes of the business can be written off against certain taxes also.

What line or business are you in and is the vehicle solely used for purposes related to your business?

Edit: forgot about write down allowances, another benefit!

Go and see the van man, if he's worth his weight in his job then he'll be advise you best way to go about.

I have done the job of selling vans before and tax liabilities are a mine field!

You might also want to look at contract hire if you need a reliable vehicle and want to commit to a change cycle.

 

[ZG002]

seriously can't see a £12k main dealer van being much more reliable than a slightly higher mileage £6-8k van, They are built to pile miles on. You are just getting sucked into something shiney imo.

 

[no_1_dave]

Exactly.

So 70% of your customers pay a higher rate than they should do in order to provide sufficient risk avoidance to the finance company for the remaining 30% who pay the same rate.

Whereas for a bank loan, 70% of people pay a rate that reflects their creditworthyness, and those with crap credit pay more.

How can your finance scheme be a benefit unless your credit rating is poor?

If you dont have bad credit, you'll almost always get a better deal from your bank unless the finance is in some sort of manufacturer sponsored deal or special offer.

This is the truth, Fox is right.
Car finance, in most cases is only better for people with low credit scores.
Your bank should be able to offer a better rate so you can close your existing finance then buy the van with cash.

 

[[TW]Fox]

This is the truth, Fox is right.
Car finance, in most cases is only better for people with low credit scores.
Your bank should be able to offer a better rate so you can close your existing finance then buy the van with cash.

Maz is however correct when it comes to lease or HP for business purposes via a VAT registered company. However as I strongly suspect there is no VAT registered company in this scenario I didnt mention it.

 

[cm1179]

Hey thats not true, the student loan only paid for the insurance

He wont be VAT registered, he'd probably have a bit more idea what he was doing if he was VAT registered.

i will be VAT registered from the 1st Dec thanks for your comment on me not having a bit more of an idea of what i'm doing but i'm not an accountant though i am a little aware of the benefits of offsetting certain things, this being one of them

 

[cm1179]

seriously can't see a £12k main dealer van being much more reliable than a slightly higher mileage £6-8k van, They are built to pile miles on. You are just getting sucked into something shiney imo.

i'm weighing up my options, if i can get a good one for £6k and get rid of the lupo, i may very well do

 

[Maz]

This is the truth, Fox is right.
Car finance, in most cases is only better for people with low credit scores.
Your bank should be able to offer a better rate so you can close your existing finance then buy the van with cash.

You read it wrong, the rates from the dealer are decided by the dealer - the rates from your bank are decided by your credit score!

So someone who can only get a best rate of 11.9% Apr from the bank can get a lower Apr from the dealer as long as they negotiate a decent rate.

The rates set by the dealer are done to earn commission, the higher the rate you sell the more the commission! So if your a decent haggler you can negotiate a decent rate of finance.

Most dealers can offer from 2.95% flat - which equates to roughly 5.9% APR based on £10k / 48 Months.

But the rate offered will also largely be down to age of vehicle, amount of credit, length if agreement.

The newer, more expensive, and less than 60mths but more than 24mths = better rates.

 

[[TW]Fox]

i will be VAT registered from the 1st Dec

Make sure you've sought professional advice before doing this - there are significant pros and cons to each way. If you are just starting out (and therefore only now need a van) you may find it beneficial to wait for a bit before doing it, as it effectively means you need to add 17.5% to your prices, not a good thing to do when just starting out.

If you do go ahead and become VAT registered then I'd look into leasing a new van - it's tax efficient.

 

[Maz]

Make sure you've sought professional advice before doing this - there are significant pros and cons to each way. If you are just starting out (and therefore only now need a van) you may find it beneficial to wait for a bit before doing it, as it effectively means you need to add 17.5% to your prices, not a good thing to do when just starting out.

If you do go ahead and become VAT registered then I'd look into leasing a new van - it's tax efficient.

If your are doing a lot of commercial work or know from the outset that your turnover will exceed VAT threshold by a lot, then it's not a bad idea to get registered asap as it can save a lot of hassle later on!

 

[Peerzy]

True but if he's just getting started and the first year might be slow and he's gonna be a man with a van or men with ven doing jobs then best to wait till the last minute so he doesn't have to charge 17.5% extra or swallow that himself.

 

[cm1179]

If your are doing a lot of commercial work or know from the outset that your turnover will exceed VAT threshold by a lot, then it's not a bad idea to get registered asap as it can save a lot of hassle later on!

i take over the franchise on 1st december, it's already over the threshold and the franchisor is VAT registered, so, it is a requirement. i had no idea really how VAT worked in business up until very recently (never needed to know) but i have now got a clearer picture. all my clients are VAT registered so it's no big deal, even when it does go up to 20%

 

[iaind]

Whats the franchise?

 

[cm1179]

Whats the franchise?

cleaning

 

[Peerzy]

i take over the franchise on 1st december, it's already over the threshold and the franchisor is VAT registered, so, it is a requirement. i had no idea really how VAT worked in business up until very recently (never needed to know) but i have now got a clearer picture. all my clients are VAT registered so it's no big deal, even when it does go up to 20%

Pretty sure best idea is to look at leasing then, with the tax benefits you can keep a well maintained new van for not much compared with dealing with it all yourself.

 

[[TW]Fox]

I did my Masters dissertation on franchising.

Good luck

 

[Morba]

Hold on, you've been jobless for a long time. In what mind is borrowing so much money a good idea?

 

[cm1179]

Pretty sure best idea is to look at leasing then, with the tax benefits you can keep a well maintained new van for not much compared with dealing with it all yourself.

thanks. this may be a better option

 

[Maz]

Sounds like you're hitting the floor running!

Go and see the van man at the VW dealer, and explain your requirements and if he or she is any good they should be able to sort you out.

Good Luck with your business

 

[cm1179]

Hold on, you've been jobless for a long time. In what mind is borrowing so much money a good idea?

let's just say inheritance is often the only positive thing to come out of a family bereavement and it wasn't that long (july)

 

[[TW]Fox]

Go and see the van man at the VW dealer, and explain your requirements and if he or she is any good they should be able to sort you out.

But make sure you go in with your eyes open and don't sign anything then and there, take it away and think about it.

Good Luck with your business

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