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Topic Title: Buying A van
Topic Summary: Beast way to pay for it ?
Created On: 07 February 2013 07:48 PM
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 07 February 2013 07:48 PM
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Ampman

Posts: 992
Joined: 06 February 2006

Evening ,

I finally need a van so wondering best way to pay for it , Im vat registered .

do i buy out right , ?

lease ?

or HP .

What best way to get as much tax relief as poss my accountant has advised the HP Route

cheers
 07 February 2013 08:09 PM
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slittle

Posts: 3459
Joined: 22 November 2007

I believe HP is the best way from the tax view point as I understand you can offset the interest payments against tax along with claiming a percentage of the capital costs of the vehicle for I think 3 years.

The only thing I would say is if work was to dry up with HP you could loose the van which would prevent you being able to work, whereas if you buy it outright, you've still got the van.

Stu
 07 February 2013 08:10 PM
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aligarjon

Posts: 2802
Joined: 09 September 2005

i am no accountant but why pay interest if you don't have to.
you'll only get a percentage back against tax

Gary

-------------------------
Specialised Subject. The Bleedin Obvious. John Cleese
 07 February 2013 08:23 PM
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Zs

Posts: 2787
Joined: 20 July 2006

Ampman, it depends on your Q indifference curve. That's attitude to risk.

Buying something older and less expensive outright means no hassle with ever owing anyone any money but a less zazzy vehicle to pull up in. When I looked into leasing three years ago I found that at the end of the lease I would have to buy the van for what I thought was too much, or return it in show room condition with all original parts. I think the penalties for it not being in show room condition after three years were too high. I eventually concluded that outright on something very basic suits me better.

If you have an accountant looking after you then even buying outright can be tax friendly. He'll claim the de valuation of the vehicle year by year.

However, I've recently given this some thought since becoming Ltd. I decided to keep the ownership of my vehicles personal and I get paid a mileage amount for using them.

It isn't just about paying things off in the future, I think it is about being able to pack a bag, lock up, leave for as long as you want, and not owe anyone any money. Freedom is of such great value.

Zs
 07 February 2013 08:54 PM
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dbullard

Posts: 1166
Joined: 02 March 2006

Interesting, I have a 06 Scudo that I have had for 4 years now and is worth bugger all to the business ....... so I popped down to my local ford dealer to look at a new van, I walked away after reaching the decision that no van is worth a larger payment per month than my mortgage, at nearly £ 500 per month for a new transit custom it ain't worth it, so I'm going to put myself forward for more training, exams etc and use that instead of buying a new "blingy" van, my Scudo is clean respectable and 100% reliable, now going to get it sign written so I can hopefully drum up more business and hopefully buy newer van later.

Regards

Daren

-------------------------
..... Dont pee in my pocket and tell me its raining ......


www.quest-electrical-sw.co.uk
 07 February 2013 09:08 PM
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stateit

Posts: 2132
Joined: 15 April 2005

Originally posted by: dbullard

, now going to get it sign written so I can hopefully drum up more business and hopefully buy newer van later.


Signwriting is The Best Move you can make with a van...

I bought a spectacularly clean '57 kangoo with 40K on the clock one year ago for £3K.

It still looks pukka (once I've cleaned it) and it's all mine. I can drive down bouncy rutted tracks with flint walls too close on either side and not have to worry about the fact it's brand new, or someone else owns it. Or if I decide to jack in sparking tomorrow I can b*gger off and drive off into the sunset with it.

I like that.

-------------------------
S George
http://www.sg-electrical.com
 08 February 2013 09:37 AM
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tattyinengland

Posts: 781
Joined: 23 November 2006

I would certainly advice to buy the vehicle outright.

Back in '09 I bought a van brand new for 10K + VAT.

Because I was VAT Registered I got the VAT back (£1750 at the time I think)

The credit crunch was on so I bought it on finance over three years at a really good low rate of finance (7% APR I think)

The eventual cost of this vehicle after three years was 14K, just because of the finance.

My bad luck though was that this was in February '09 - about a month before the government bought in the scrappage scheme and I thought that by 2012 I would be almost the only person in the country with an '09 reg Van - making it a very valuable 2nd hand re-sale.

Unfortunately for me the scrappage scheme came in a month or so later and I could not afford to take advantage of it and had already sold my old clap trap of a Ford transit.
 11 February 2013 12:08 AM
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Martynduerden

Posts: 3211
Joined: 13 July 2008

Buy it outright.

I have always owned all my vans outright with the exception of my current van.

I had all sorts of issues in my last buying session but I ended up buying New on HP, I wanted to buy outright but 20k hits the cashflow way to hard.

If you do HP then you claim the vat back instantly (if registered) and your interest payments too you also get capital allowances on the purchase or if you have a particularly good year you do 100% AIA up to 25k to save tax in that year.

Options options options.

-------------------------
Regards

Martyn.

Only a mediocre person is always at their best



www.electrical contractors uk.com
 11 February 2013 07:31 AM
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markespark

Posts: 87
Joined: 27 November 2010

Over the years I bought vans all ways - contract hire on a 3+35 basis gets u in a new van cheap & as it's a rental 100% offset against tax but you give it back.
I've financed leased higher monthly payments & bigger deposit generally but you own it at the end
HP all vat upfront higher payments & a tax write down over it's first three years
That said my van now is a Peugeot Partner 57 plate that I bought on HP - I own it outright no monthly payments & it still looks good so I asked myself why bother changing ???
I looked at the Nissan NV200 9k + vat bit bigger which would be nice but I've survived with a smaller van for years & do I really want to pay 1500 deposit, 178 a month for 4 years & still owe 3k ???
my advice would be to try & get a low mileage second hand van (hard I know) vans seem to go forever these days
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