finance for new/second hand machinery

[Graham w]

Lease hire is a good option for tax benefits but the machinery needs to be near new... I tried to a lease set up on a 26 year old mog chipper crane combo a few weeks back and it was refused on the grounds it was to old though so your limited.

 

 

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usually machinery has to be within ten years old when your payments finish so that it can be and sold easily by the lender if it was to be repossessed.

 

however i managed to get a 25 year old tractor through the bank, when i hit the 'must be under ten years' nonsense i told them it would appreciate in value.

 

Got the tractor! :thumbup:

[richy_B]

I think it very much depends on the type of kit and the volume of work you plan on doing with it. I have found in the cases of a chipper/ mini digger/3cx/more common bits of plant that if you are going to be using them on a fairly regular basis (15-20 hours a week) then buying new with finance is very attractive.

 

You get a brand new machine with warranty. Higher chances of reliability and hopefully less downtime. You can buy near the end of your VAT quarter so you can reclaim quickly. Low finance rates (I've been offered JCB finance at 3.1% before). Put down a larger deposit if you want to reduce the finance amount. Then at 5 years old you've still got a machine you can sell on for a decent resale value.

 

I dislike leasing as primarily because the hours limit per year is usually low (500 hours PA is common in my experience) and the additional hours charge is a lot. For a chipper I would expect to clock 800-1000 hours a year.

[Tom D]

Its the way to go, very few companies have the cash to buy big kit outright, I have been getting quotes this week for a new tractor, best so far is around 6%. I am hoping for better though.

 

The disadvantage with a bank loan is that it may be secured against your own assets like your house, finance is secured against the machine.

[Ian C]

I think it very much depends on the type of kit and the volume of work you plan on doing with it. I have found in the cases of a chipper/ mini digger/3cx/more common bits of plant that if you are going to be using them on a fairly regular basis (15-20 hours a week) then buying new with finance is very attractive.

 

You get a brand new machine with warranty. Higher chances of reliability and hopefully less downtime. You can buy near the end of your VAT quarter so you can reclaim quickly. Low finance rates (I've been offered JCB finance at 3.1% before). Put down a larger deposit if you want to reduce the finance amount. Then at 5 years old you've still got a machine you can sell on for a decent resale value.

 

I dislike leasing as primarily because the hours limit per year is usually low (500 hours PA is common in my experience) and the additional hours charge is a lot. For a chipper I would expect to clock 800-1000 hours a year.

 

No hrs restrictions on any of my kit and thats lease hire.

If you want to take on bigger jobs you need good kit and finance is the way to go and will be inevitable at some point as you grow.

[richy_B]

No hrs restrictions on any of my kit and thats lease hire.

If you want to take on bigger jobs you need good kit and finance is the way to go and will be inevitable at some point as you grow.

 

That's got to be fairly unusual, who do you get them through? I can't see how it makes sense for a company to lease you a machine and not have any restrictions. You lease a 3cx for 5 years and return it with 2500 hours or you return it with 7500 hours - massive difference in disposal value for them.

[Ian C]

Most of my kit is through societe general or something like that, I dont hand it back at the end I pay150 a year after its paid off and when I sell get too keep the sale price.

 

Same as hp but you pay the vat monthly not in one hit up front.

 

Sorry mine is lease purchase I think, anyway its like I just said.

Edited April 8, 2014 by Ian C

[richy_B]

Most of my kit is through societe general or something like that, I dont hand it back at the end I pay150 a year after its paid off and when I sell get too keep the sale price.

 

Same as hp but you pay the vat monthly not in one hit up front.

 

Sorry mine is lease purchase I think, anyway its like I just said.

 

Ah, I understand. The machine value will be figured into your monthly payments then obviously the lower the hours the better chance of getting a higher resale when you sell it.

 

Finance companies like to confuse things with lease hire, lease purchase, hire purchase, contract hire, contract purchase or any other combination of similar words! Its like the j̶u̶d̶e̶a̶n̶ ̶p̶e̶o̶p̶l̶e̶s̶ ̶f̶r̶o̶n̶t̶ peoples front of Judea.

[Johny Walker]

look about tescos and sainsbury doing loans @ 4.5% ,hsbc sticking to ther we

 

14.9 % !!!!!!!!!!!!!!!!!!!

[adam pike]

Speak to Marco he has done all of our finance chippers, stump grinders, and vans his number is 01604 639 666 / 07710 433 255

[Jonny69]

Its the way to go, very few companies have the cash to buy big kit outright, I have been getting quotes this week for a new tractor, best so far is around 6%. I am hoping for better though.

 

The disadvantage with a bank loan is that it may be secured against your own assets like your house, finance is secured against the machine.

 

Is that an APR or flat rate?