car lease news

It is difficult to calculate the real benefits or disadvantage of each business owner, because each one is likely to have different tax codes, earnings and choice of vehicle from different business lease suppliers. But here are some pointers, so you can calculate your own benefits, it should also be noted that the comparsion is between buying a new car and leasing one. A used car has different VAT  or even no VAT charges.

Disadvantages

You will be charged tax on your personal earnings as you now have a company car and is deemed a “perk”. This value varies depending on the CO2 emmissions of the vehicle but an average figure is 20% of the vehicle value.

The lease broker will want a cut of the lease value or car value.

You will pay interest on the amount borrowed.

Advantages

This is a business expense so

You can claim your VAT back (again the amount depends on C02 emmsision of the car)

You can claim the balance against you annual tax return.

The money you were going to use to purchase the car can stay in the business and depending on the profitability can either increase in value or reduce debt chrages.

(This could be the most valuable benefit of busines lease)

Finally if you were to buy the car, you would need to earn aproc 20% more than the vehicle you were going to buy, taking into account incme tax and national insurance.

Taking all this into account, for many business lease will be cheaper than taking monmey out of the business to buy a new car and even cheapr than a loan  to buy teh car.

Of course the above example may not represent your situtaion and will differ on many points, including the depreciation of the car chosen. So always get professional advice.

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This is an America news report from Money Talks that examines the ways of getting out of a car lease contract. For many especially business owners, car lease has its advantages, but we must always remember that this envolves financial commitments. In the USA there are ways of getting out of your financial commitments, for selling the car (with permsission), getting sometone else to take over the lease, to not being able to anything. The final conclusion being, think carefully about car lease before you commit. In the UK, it is probably harder to get out of a contract, so as all financial decisions, make sure you know all the facts and if you do not get professional advice. Here is the money talks video.

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We are in a period of time when driving instructor training organistions are seixing the opportunity to market their services even on TV, such is the damand for a new career. In most cases they will advertise a fully maintained car, but it is not until to find further details that you will learn that in most cases this car will be leased.

It takes a different approach to see your business vehicle as a monthly expense rather than an asset to buy and maintain. Most driving instructor training schools will in fact lease a car for the student, sometimes in bulk to get cheaper rates and then will charge the car to the pupil, to give them a good start in their new career as as driving instructor.

Pupils receiving driving instructor training in Middlesbrough from a company called Clearway, will use Citroen C3 cars leased to ensure the right brand image is displayed throughout all their employed instructors and to keep running costs down with new modern cars. The fact that all the cars leased can be the same colour, make and model with the same signage can be a powerful marketing tool.

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