VAN - Buy or lease, pros and cons

[Lazlo]

Need a bigger van, have about £7-8K to spend, purchased my existing one but wondering if it might be sensible to lease a brand new one, what do others do.....

Pros and Cons from your experience?

 

[Leesparkykent]

If you do a lot of miles leasing can be expensive but it is 100% tax deductible.

 

[telectrix]

get a nice 2nd hand transporter for that money.

 

[Lazlo]

Yeah that's what I looked at (along with a newish transit) but I was thinking if this goes wrong on me (like cars/vans do) I'll be up poo creak without an oar. Had a VW Golf GTI Mk4 years ago, had to be the most unreliable car I ever owned, was bad luck but was also major hassle.

My trusty newish combo has been ultra reliable and easy to drive (1.7) but is now way too small...

 

[Leesparkykent]

Have a look at vanarama really competitive and if you enquire they do not hassle you for a sale.

I have two of these of them but I have a higher mileage allowance.

http://www.vanarama.co.uk/ford-van-leasing/transit-custom.html

 

[Lazlo]

So if my tax is running at circa the same amount as lease repayments might be I might as well be driving around in a new van and not paying the money to the tax man?

 

[Octopus]

Ask your accountant?

Personally I'm pro 2nd hand purchase ........

 

[Lazlo]

Yeah will ask them this week...

 

[D Skelton]

So if my tax is running at circa the same amount as lease repayments might be I might as well be driving around in a new van and not paying the money to the tax man?

Doesn't quite work like that I'm afraid.

If your tax bill per year is £2,000 say, that means your taxable profit must be £10,000. Lease a van at £200 per month and that will cost you £2,400 per year. This reduces your taxable profit by £2,400 to £7,600 per year, however your tax bill is only reduced by £480 to £1,520 per year.

You'd be spending £200 per month on a van to make a £40 per month tax saving.

People seem to have this misconception that spending money is the best way to avoid a high tax bill when in actual fact all spending money does is reduce the amount in your pocket at the end of the month.

In response to the OP, I've always bought outright. Leasing is expensive and will cost you more in the long run than buying. Use part of your annual investment allowance to recoup the cost of buying and that too then becomes 100% tax deductible in the year you make the purchase.

 

[Octopus]

WOT he said ^^^^

Cracking advice.

 

[Lazlo]

Brilliant, cheers. That's exactly what I needed to know.

I'd need to be spending more like £830 a month on a van to offset the example tax fully, that would be bonkers.

Will probably part ex my van and just get a bigger newer one and get the accountant to sort it out.

Ta

 

[D Skelton]

Brilliant, cheers. That's exactly what I needed to know.

I'd need to be spending more like £830 a month on a van to offset the example tax fully, that would be bonkers.

Will probably part ex my van and just get a bigger newer one and get the accountant to sort it out.

Ta

In other words, you'd have to spend all of your taxable profit, in order to avoid paying tax on it lol.