Lease hire or HP?

[MattyF]

My chippers on hp, there is some wierd clause ,once paid for after 3 years i then pay them £100 a year untill I sell the machine.so far it works for me wish I had done it years ago instead of wasting time on old machines.

[TimberCutterDartmoor]

I'm looking into it for this:

 

http://www.morbark.com/Equipment/SpecSheets/M12R%20TRACK.pdf

 

It's not brand new but v low hours; dunno if I can get finance for such...

Been talking to closeassetfinance; the same people who do do Arbinsure stuff...

Edited March 13, 2011 by TimberCutterDartmoor

[tree_beard]

thats a thing of beauty jon...

 

new truck and trailer on the cards as well, to shift the thing around?

[nick channer]

My chippers on hp, there is some wierd clause ,once paid for after 3 years i then pay them £100 a year untill I sell the machine.so far it works for me wish I had done it years ago instead of wasting time on old machines.

 

all you have to do after the 3 yrs is up is sell the machine to a friend or family member for say £10 and then buy it back for £11.. just by raising an invoice it takes ownership away from you and no more £100 yr payments to hp company.. we do it with tractors and machinery all the time..

[TimberCutterDartmoor]

It's a morbark beever m12r track - as per recent new thread "pic for josharb". No new vehicle - just a friendly local transport company. It's a big if tho. Drop dead gorgeous machine tho eh!

[PeteB]

3 tonnes light I'll add!

[Tree cutter Stu]

Iv got a Morbark very solid machine mine weights 3 ton

[Tom D]

Out of interest Pete, how much would a new 9 inch greemech be?

 

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[Jonny69]

I've just gone for a Nissan Navara on Lease Finance.

 

These are the main bullet points, if you like:

 

* Nissan Navara with added extras of canopy, load liner, all terrains, tow bar, reversing sensors for £293 a month plus VAT

 

* Final balloon payment of £5600 at the end of the 5 year lease, which is comfortably less than 100k 5 year old examples are going for at present (with the extras, it's a £25k vehicle).

 

* Three ways to sort the balloon payment out at the end. Either the lease company takes it back, and sells it (and you pick up the profit or shortfall), you sell it (and pickup the profit or shortfall) or you sell it to a third party who can then sell it back to you (same deal with profit or shortfall).

 

* No mileage restriction, no clauses for condition of the vehicle in the end as it's in your interest, financially speaking, to look after the vehicle.

 

* Fully qualifies for tax relief (for those who aren't VAT registered) and you can claim the VAT back each month if you are.

 

* Ended up working out cheaper than running the old vehicles we've always had, especially when you factor in lost earnings due to repairs/MOTs etc.

 

Truck will be delivered before the end of the month, and I must say that I am very excited!

 

Jonathan

 

Big J I have just had the calculator out and I can save you £4'000 on that vehicle over the 5 years by doing it HP. PM me if you want to sort some paperwork out. With the montly repayments at 342, so almost identical. Can save you even more if you can pay 450 a month (no VAT on monthly payments too)

 

Benefits are you can sell it when you like and settle, pay it off when you like to save the interest. Give it back after half the agreement with no liability if business goes a bit wrong. You also own it at the end etc etc.

 

One of the best things about HP is its flexibility. If you wanted a defender and a mog in a year it is easy to change with no penalties to worry about. Business are always changing. Swapping the equipment to suit jobs contracts etc is a lot easier with HP.

 

Cheers

 

Jonathan

 

P.S I you wanted one a year old at about £16,000 +vat the saving over the period will be about 9k over having a new one but you will factor a little in for servicing, tyres, MOT etc

[iainarkle]

As someone said, it all depends on cashflow at the time you need it. Also, depends on if you want to 'build' your accounts and value of the business then finance lease.

HP is the less complicated but there is also another option. Contract hire, you never own it, you don't have a balloon payment and everything is fixed cost. At the end of the term or at any given point you can start negotiating. The hire company doesn't want to hold stock of used vehicles or machinery (they are a bank not a dealer) and they typically go to auction so if you negotiate hard you can get the vehicle for its true cost at that point in time if you want to own it...often this will be less than any balloon payment. If not you just give it back. Simple, you have just paid for the use and maintenance of it.