LEASING

Leasing is another cost-effective option offering useful tax advantages, particularly for VAT registered businesses. It allows you to share in the profit or loss, made on the sale of the car at the end of the agreement. There are two types to choose from, full payment lease or balloon lease.

Benefits

- Lower monthly payments
- The vehicle can be treated as a balance sheet asset
- Writing down allowances can be claimed

How it works

Full Payout Lease
You spread the cost of the vehicle over the period chosen and, at the end of the agreement, must sell the vehicle to a third party. You then receive a proportion of the sale proceeds as determined at the start of the agreement. Alternatively at the end of the period the agreement can continue into a secondary period where you pay a nominal secondary rental called ‘peppercorn’ rental.

Balloon Lease
You offset an amount to the end of the agreement to lower the payments. At the end of the agreement you sell the vehicle to a third party and keep any proceeds of the sale over the amount of the balloon. If there is any shortfall however you will be responsible for covering the shortfall amount.

Finance subject to status over 18s, indemnities may be required. Terms and conditions apply.