Finance or Lease hire

[Zenfordinner]

I concur with the accountant: if you can afford to buy a vehicle outright, do so; even if it means having to wait a bit longer.

 

We have used finance companies, the important thing is to thoroughly read the fine print before signing, and making sure you can keep up with the payments, come rain, come shine, as the agreements tend to wholly side with the leaser/financer. The inter

est on finance comes out of p&L aspect of accounts, but the added interest certainly beefs up the price.

Some of the contracts/agreements that I have seen state the vehicle has to be sold to a third party at the end of the agreed term with a percentage going to the financer. This is alright if you are up for it.

Depending on your financial status etc they may want a signature in the event that you cannot make the payments, in which case the signee can be held (personally)liable for payment should the agreed terms not be met. This means that should the business fail, then the backer can be chased for monies owed.

[mixedangased]

allways buy outright if you can,probally not the most tax efficiant way but when times are hard you aint gotta pay the rent and it aint drinkin or eating anything if its parked up

[skyhuck]

Depending on your financial status etc they may want a signature in the event that you cannot make the payments, in which case the signee can be held (personally)liable for payment should the agreed terms not be met. This means that should the business fail, then the backer can be chased for monies owed.

 

There would not be a great deal of point in having a guarantor who was NOT liable, now would there???

[Zenfordinner]

There would not be a great deal of point in having a guarantor who was NOT liable, now would there???

 

Indeed not, for the financer anyway. The point I was making was that in some instances directors are not held accountable if a business fails (hence some being able to leave a bankrupt business and move into another the same immediately), whereas if one personally guarantees the finance they can be personally chased for monies owed, which if they own a house for example, will be seen as collaterol. I have no idea what form Steve's business runs, I was merely being cautious. Some finance does not require a personal backing, which means the business is accountable, not the individual ( I realise I am stating this rather simplistically, but it will suffice in this instance). Over many years I have spoken with people who, perhaps, too easily got themselves involved in borrowing money, only not to fully understand the terms and conditions, and had their fingers burnt because of this.

[Tom D]

I wenty for HP but i only financed part of the deal like that the rest was paid for outright, that way if things go belly up the value of the vehicle should always be higher than the value of the loan, they simply take it back. If you have 15-20K sitting around then buy outright but most people don't I would imagine.

 

I looked into lease / hire and yes you can claim the whole thing against tax and if it breaks they should suppy you with another one, there is no serviceing to pay and probably no insurance, you just put fuel in. If times are hard at the end of the term you can walk away owing nothing. The people I spoke to did'nt seem to mind mods / signwriting etc. The downside is that overall its quite expensive and you don't have an asset at the end of it.

 

Before I bought the landy I had always gone secondhand but now I'm not so sure, the lDV is in for its MOT today this can often be an expensive time. I now think a new vehicle with a 3 year warranty is the way to go, less down time and hassle free. I used to do all my own repairs / maintenance but now its more cost effective to stay working and get someone else to do it, but I suppose this depends on how much free time you have.

[Lee Winger]

If a firm can't afford the HP re-payments on a 30k truck/lorry , it confirms it too me, this industry is the dregs!

[conkers]

If a firm can't afford the HP re-payments on a 30k truck/lorry , it confirms it too me, this industry is the dregs!

 

Totally agree. To maintain a service to a customer the tradesperson should at least be able to budget for a vehicle that is not going to be a constant worry, new or old.

 

Doesn't mean driving around in a gold plated mog tho

[Arborlord]

Own every thing out right then when times are tight you can just sit and wait or temp go do some part time subbin or different work as long as you have your gear you can take what comes and ride the credit wave.

[Steve Bullman]

if i had 15k+ sitting in the bank i wouldnt have needed to started this thread!!!

[Andy Collins]

A long time ago someone said to me if you cant afford to save you cant afford to borrow, dunno how this fits into the business environment as most seem to borrow.