I am a partner in a business and our current arrangement is that we both have a car paid for through the business, along with all running costs (insurance, fuel, servicing etc). The accountant files the costs as a 50/50 split between company and personal use for tax purposes. As we are a partnership, the business costs are deducted from profits (i.e., we don’t pay a ‘benefit in kind’ tax). The cars cost around £400 each on the leases.

However I have had enough of leasing a car and the associated hassle (worry about charges on return, the knowledge it will never be mine etc) so have started to look at options. Initially I thought I would simply buy a second-hand car through the business and pay it off over a couple of years however this means it will continue to belong to the business until its value is eventually written off (which will take a long time). So my accountant suggested I buy a car personally and just claim back business miles.

The problem is that looking around now, I could get a very nice Merc/Audi/BMW for <£300 a month on a lease but to get anything like as nice as a purchase, I would be looking at a £300 per month loan over 5 years for a similar sort of car that is perhaps 2 years old at purchase date – meaning it would be 7 years old before it is paid off.

I really don’t want to lease again but the maths don’t seem to add up otherwise – if I were to buy a car that I could pay off in a reasonable amount of time then I will end up buying a much older / lower spec car.

FWIW, my partner is happy to continue with the current arrangement.

Surely there is another option I haven’t thought of yet????

I suppose the third option is PCP. You lease it, then after the lease expires you have the option to return it or pay a lump sum to buy it.

Whether that’s a good idea / cost effective for you, I wouldn’t know.

You’ll have more options if you buy through the business, Asset Finance Brokers and direct providers will give you more options but they only want B2B business (consumers are a pain in arse).

You could consider a HP with a balloon payment. You pay a deposit, typically 10% and off-set 60%-80% of the final value until the end. The monthlies are lower (in the same way as PCP) and all things being equal you can sell it / part-ex before the balloon payment date and leave will some equity.
There aren’t any condition clauses, because the risk sits with you. You mistreat it and you’re liable to make up the short-fall if you can’t sell for enough to cover the final payment – it’s not as risky as it sounds, you can refinance the balloon at the end and vehicles are fairly transactional things these days, a 3 year old car is worth X based on mileage, condition isn’t a major factor as long as it’s not obviously wrecked – it’s maybe £500 in smart repair to make a rough looking car sellable again.

If you balance it right, you can usually VT out of it if the market for your vehicle has fallen for whatever reason anyway – being a partnership means that whilst you have access to B2B finance, you’re still protected by a lot of consumer law that Ltds aren’t.

Unless you already have the cash to buy a car you’re going to be stuck with borrowing £xk which costs.
Sounds like you want own a ‘nice’ car without actually paying the higher cost of initial purchase. I’m afraid if you really want that type of car you’re going to have to live with the borrowing cost or go back to a renting leasing – otherwise you may have to readjust your car expectations.

I’m not aware of a situation here where you can have your cake and eat it.

This a problem with the ‘car culture’ in this country. Number plate changes make it obvious how old your car is and some people see this a bad thing hence the seemingly constant desire to have a shiny new car with the latest plate.
Plates without the age of the car on them would reduce this problem.

I looked at these recently and one problem now with the company buying a car is that depreciation etc is linked to the emissions – consequently a big engine car was a serious non-no.

Why not look at a Directors Loan and pence-per-miles (45p for first 10k, then 25p).

You want a car you can’t afford.
Try and want a car that you can afford.

I don’t really see how buying a car will be less stressful than continuing to lease.

Can you not give yourself a monthly car allowance?

I don’t really see how buying a car will be less stressful than continuing to lease.

Because I won’t stress about any damage on handback

Can you not give yourself a monthly car allowance?

I could but that would be subject to tax – a £400 lease on a car through the business costs around 20% tax (as I can offset some of it against profit), £400 allowance would cost me 40% tax.

Sounds like you want own a ‘nice’ car without actually paying the higher cost of initial purchase.

It’s more of a case of if I borrow the money, by the time it is paid off the car will have lost much of its value and be much older (current car retails at £42,000 and costs me £400 a month – that’s £19,200 over four years) – at that payment it would be 8 or 9 years before it was mine if I bought it – by which time I would have to look at buying another…. If I continue to lease I stay in a car that is max 4 years old.

johndoh – Member
Because I won’t stress about any damage on handback

Fix it before handing it back? It’s not that different to selling on or trading in, you’ll lose money there too if you punt when it looks shit

“Because I won’t stress about any damage on handback“

But you’ll stress about VED and MOTs and incidental repairs. It won’t be under warranty for the whole 8-9 year period you’re talking about. Just read any of the lease vs. buy threads on here, used cars are not stress-free.

used cars are not stress-free.

But we have a ten year old car sat at home (owned from new) – that doesn’t stress me out at all.

Perhaps it is my perception of cars and their relative values…

you are in the fortunate position as a partner in the business to be able to get a low cost (to you personally) nice car by legitimate accounting. Take full advantage of the situation, or buy yourself a less good personally owned or PCP’d car for the same money….

Whatever you do, if it’s going to cost over £40k don’t wait for April…

Ask your accountant about taking a loan from the company and buying the car cash.

I have kept plenty of cars for 10 years with no stress. Depends what you buy

johndoh – Member
I could but that would be subject to tax – a £400 lease on a car through the business costs around 20% tax (as I can offset some of it against profit), £400 allowance would cost me 40% tax.

Give yourself a bigger allowance then & pocket the change?

You want a car you can’t afford.
Try and want a car that you can afford.

This is exactly the ignorant, sanctimonious twattery that makes this place what it is. Well done :roll:. Glad to see if has been ignored (until now!).

Give yourself a bigger allowance then & pocket the change? [/I]

An allowance is taxed as salary.

angeldust – Member

This is exactly the ignorant, sanctimonious twattery that makes this place what it is. Well done 🙄 . Glad to see if has been ignored (until now!).

You sound unhappy. 🙁
Maybe you’d be happier if you learnt to make do with your lot. 🙂

I’ve edited your quote for you so the smiley works, maybe that will cheer you up! 😀

FWIW, I absolutely love cars. Not diesels or 4x4s, I’m not a farmer! I like large capacity RWD petrol V8s with several hundred horsepower, and have been fortunate enough to have owned several.

I’ve made the lifestyle choice of abandoning car ownership due to reasons of environmental and social responsibility, with the added bonus of allowing me to be extra sanctimonious in the face of you, which brings me extra joy. 🙂

Think I’ll pop to the pub, on foot. 😉

Because I won’t stress about any damage on handback

Its only half the stress though as your partner bares half the cost of the repair.
With your own your own car, you have to pay 100% of the repairs.

I don’t get the stress of leasing. My last lease BMW went to the local cheap dodgy garage for body work repair before going back at the end of the lease, cost me all of £150.

Look at electric / hybrid on company lease, that should pursued you to keep leasing !

I’ve made the lifestyle choice of abandoning car ownership due to reasons of environmental and social responsibility

Of course you did! 😉

Ask your accountant about taking a loan from the company and buying the car cash.

As said above, we are a partnership so any profit we make in a financial year is taxable – it doesn’t help.

Glad some people are seeing what I am saying – it’s doing my head in trying to work out what to do.