New car delays.

Soldato
Joined
14 Dec 2003
Posts
5,301
If you owned the M3 outright and weren't paying interest on it, it probably would be cheaper to just own it. But leasing with 2% BIK will be cheaper than PCP
 
Soldato
Joined
9 Mar 2003
Posts
11,127
Salary sacrifice - quite the saving.

Only against other leasing arrangements but that doesn’t mean it’s cheaper than ownership, particularly right now with very low depreciation and high lease costs.

Sure the cash going out of the bank is lower, a lot lower in fact. That doesn’t mean the total cost of ownership is less.

Its a company tax thing. My accountant has been going on for a while about it but in broad terms its the same as giving myself salary increase by however much it costs per month but only paying 2% tax on the value instead of being taxed 40% on the wages I draw to pay for my personally pcp'd one.
Your right, my own M3LR is now 1 year old and worth pretty much the same as its purchase price at the moment so I can duck out of my PCP with a few quid in the bank and then swap to this when it arrives.

Long term I will need to buy again but this makes sense while the rate is 2%

I’m following you. I still would have thought the depreciation on the one you own (which in addition to interest paid is the relevant cost of ownership, ignore the PCP monthly’s) will be far lower than the cost to lease a new one and 2% BIK.

I guess it depends how much interest you are paying but the lease costs still need to be met either way via the business (which I assume you own).

That said not everything is about the money and clearly you are upgrading too!
 
Soldato
Joined
18 Oct 2002
Posts
3,624
Location
Sussex
I’m following you. I still would have thought the depreciation on the one you own (which in addition to interest paid is the relevant cost of ownership, ignore the PCP monthly’s) will be far lower than the cost to lease a new one and 2% BIK.

I guess it depends how much interest you are paying but the lease costs still need to be met either way via the business (which I assume you own).

That said not everything is about the money and clearly you are upgrading too!
I took the upgrade to performance as the sweetener to the change, didn't want to feel I was just getting the same exact car again so a colour change to white with white interior and the performance option. 3 Year lease. Should keep me happy as I tend to get itchy around year 3 of a car.

Tbh the depreciation part is mostly irrelevant, for the last 3 PCP cars I've had i've jumped out on year 3 with little to pay or money in hand so I regard them more as rentals. its just that tax difference for me. I ether pay a monthly pcp out of my own pocket and draw money to cover which will be taxed at 40% (so a 700 pcp needs a draw of 980 to cover it) or the company lease it and i'm charge 2% of the value of the car, a lot less. Plus there are other things the accountant will do. When they change the BIC rate things might look differnent but for now it makes total sense.

That said, my M3LR has been a game changer for me in cutting monthly running costs, even though the pcp is higher than my previous M240 the overal cost to own monthly is massivly lower, even when petrol was 1.25 a litre, now its just ridiculous. I do also love the car, few qwerks aside its great to own.
 
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