TaxiDriver Posted July 11, 2013 Report Share Posted July 11, 2013 How does personal leasing work (essentially) Why does it seem to be dearer than business leasing ? Quote Link to comment Share on other sites More sharing options...
welsh1 Posted July 11, 2013 Report Share Posted July 11, 2013 How does personal leasing work (essentially) Why does it seem to be dearer than business leasing ? Its dearer i think because you can claim vat back on business leasing. Quote Link to comment Share on other sites More sharing options...
Chr15j Posted July 12, 2013 Report Share Posted July 12, 2013 Hi, this is what I do for a living so I think i can help. There are several reasons why personal is more expensive than business leasing. Firstly, under business leasing you can claim back 50% of the vat on the rental on a car and 100% on a commercial vehicle, you cannot do this on personal. Secondly, the risk to the funder is a little greater under personal so (like insurance) sometimes they charge more (but not always). Additionally, with some funders, under personal leasing, taking maintenance is compulsory, but optional for business. Furthermore, some funders don't actually deal with private individuals, so if they have the best rate for business on a certain vehicle, you will have to go to a less competitive funder for personal leasing on that same vehicle. Or, they just crank it up for personal because they know they can. With regards to how it works.. There are two popular products. Pch (contract hire) and PCP (contract purchase). With pch, think of it as hiring a car for 2-5 years. At the end you hand it back and start again. With PCP you. Have the option to buy (in the form of a balloon payment at the end), or just hand it back and start again. I have over simplified the above for ease of posting on here. Hope this helps... If you want more info or a chat, drop me a pm with your number and I'll give you a call. Chris Quote Link to comment Share on other sites More sharing options...
TaxiDriver Posted July 12, 2013 Author Report Share Posted July 12, 2013 Thanks for the input. I don't really understand how my claiming the VAT back affects what I pay to a leasing company, unless the vat is refunded at the point of source ie by the leasing company ? Im hoping to sell up both my taxi and private hire vehicle and get out of the taxi business, I shall need to buy/lease a car/4x4 of a reasonable size, The idea of maybe leasing appeals as I could possibly enjoy something much newer and of better standard without suffering the effects of depreciation and then be able to upgrade in 2 or 3years ? monetary wise I'll have a set monthly expenditure hence easier to budget. All seems a bit to simple/to good to be true? Quote Link to comment Share on other sites More sharing options...
Will Poon Posted July 12, 2013 Report Share Posted July 12, 2013 Hi taxi driver , I've leased vehicles in the past both through business and personal my accountant advised me well on both accounts, if you have an accountant speak to them as they will know your finances Quote Link to comment Share on other sites More sharing options...
Chr15j Posted July 13, 2013 Report Share Posted July 13, 2013 Re the vat aspect, if leased through the business and you're vat registered then you can claim back/offset the appropriate amount of vat. So you pay full vat inc price to leasing co and then claim/offset. Yes it is simple and not too good to be true. Quote Link to comment Share on other sites More sharing options...
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