leasing your van

[dazmond]

As I said, never got involved with any type of car finance. I had a company car for the first 10 years of driving, family business, and have paid cash for everything after that. Just thought that after the balloon payment you owned the vehicle, I now know you don't.

im the opposite.....i used to pay cash for old vehicles and had no end of problems with breakdowns,etc......now i just prefer to lease a  brand new car and then chop it in for a new one a few years later......its my little treat to myself......

no MOTs

no breakdowns

hassle free

i like driving new cars

 

[harunh]

its called a peppercorn rental.....the only way you can get out of it is to sell the van,pay the balloon and then its end of contract....

always read the small print......

ive just ordered a brand new golf GTD DSG on a 3 year lease contract hire as my present GTD contract ends in a few months.....it should get delivered within 8 weeks

Should of got the R instead of the GTD ?

 

[spruce]

As I said, never got involved with any type of car finance. I had a company car for the first 10 years of driving, family business, and have paid cash for everything after that. Just thought that after the balloon payment you owned the vehicle, I now know you don't.

Lease was simple in the early days. 3 monthly payments + VAT down and 35 or 47 monthly payments + VAT. Hand the vehicle back at the end of the contract and they hit you with 'damage' rectification costs.

In all respect to @dazmondthere is no way his van is worth k7 at 5 years old to the trade, even with low mileage. They will want to mark that up by at least a thousand, possibly 1500 pounds. They are letting him know through his pocket its better for him to take on another lease.

They will write the value of the van down using some of the interest he's overpaid as well as using any fleet bonus they got after the sales to year end targets achieved set by the manufacturers are paid out.

Him finding a buyer means more profit for them with the least amount of sales effort.

 

[dazmond]

Should of got the R instead of the GTD ?

too many get stolen mate.....not worth it...they are a prime target for criminal gangs around here......

 

[Part Timer]

im the opposite.....i used to pay cash for old vehicles and had no end of problems with breakdowns,etc......now i just prefer to lease a  brand new car and then chop it in for a new one a few years later......its my little treat to myself......

no MOTs

no breakdowns

hassle free

i like driving new cars

I now buy new vehicles, 2nd hand ones don't seem to be the value they once were.

 

[dazmond]

Lease was simple in the early days. 3 monthly payments + VAT down and 35 or 47 monthly payments + VAT. Hand the vehicle back at the end of the contract and they hit you with 'damage' rectification costs.

In all respect to @dazmondthere is no way his van is worth k7 at 5 years old to the trade, even with low mileage. They will want to mark that up by at least a thousand, possibly 1500 pounds. They are letting him know through his pocket its better for him to take on another lease.

They will write the value of the van down using some of the interest he's overpaid as well as using any fleet bonus they got after the sales to year end targets achieved set by the manufacturers are paid out.

Him finding a buyer means more profit for them with the least amount of sales effort.

ive just looked at my CONNECT L2 240 limited van on van trader and a similar van thats 5 years old with 5k MORE miles (than mine will have on it next year) are being priced at 13k-14k!unbelievable!

my van will easily be worth £7k with £16k on the clock at 5 years old!.....

 

[ched999uk]

my van will easily be worth £7k with £16k on the clock at 5 years old!.....

Second hand van prices are through the roof. You might even be better off selling the van and taking out a new lease. 

 

[dazmond]

Second hand van prices are through the roof. You might even be better off selling the van and taking out a new lease. 

unbelievable isnt it?first time ive looked at second hand vans for years!why are they so expensive?

 

[Cghwindowcleaning]

But you've all ready paid 4 or 5 years of payments by the time you factor that in with the balloon payment you've paid well over the  price.Had you bought it outright when you first got it I think they were around £16k

 

[dazmond]

But you've all ready paid 4 or 5 years of payments by the time you factor that in with the balloon payment you've paid well over the  price.Had you bought it outright when you first got it I think they were around £16k

ill have paid just over £20k altogether.....new connects(the same spec as mine) are going for £26k these days!madness!

 

[ched999uk]

unbelievable isnt it?first time ive looked at second hand vans for years!why are they so expensive?

Very good question. Some say Covid and delivery drivers but I haven't noticed Amazon or couriers using small vans! 

I can't work out why as London Emissions zone coming in soon so all Euro5 and lower vans and cars will have to pay £12.50 a day to drive within the north and south circular from October this year. So you would have expected companies to start getting rid of older vehicles.

Read 2020 top 10 vehicle sales by numbers and within top 10 there are 3 vans!!!! I wonder what I am missing??? Maybe vehicle tax advantages? Can't work it out.

 

[Cghwindowcleaning]

ill have paid just over £20k altogether.....new connects(the same spec as mine) are going for £26k these days!madness!

Not if you look around.I know second hand vans are holding up well but new ones aren't that much.

There is one on auto trader like yours brand new facelift  lwb transit connect limited all the extras in silver priced at £16500 + vat

I'm not knocking you.You're happy with the agreement but your wasting your money leasing vehicles.

It has never been cheaper to borrow money than at this present time.A bit of deposit and the same term you would have owned the van out right by now for similar monthly payments with no ballon.

You could have then sold the van yourself for say 8k-9k got a loan for 10k over 4 years paid around £220 a month possible less and got another new one and owned it.Keep it for 5 years have a year of no payments then sell it and repeat the process.

Long term you own something but you also save yourself money.

 

[Cghwindowcleaning]

Very good question. Some say Covid and delivery drivers but I haven't noticed Amazon or couriers using small vans! 

I can't work out why as London Emissions zone coming in soon so all Euro5 and lower vans and cars will have to pay £12.50 a day to drive within the north and south circular from October this year. So you would have expected companies to start getting rid of older vehicles.

Read 2020 top 10 vehicle sales by numbers and within top 10 there are 3 vans!!!! I wonder what I am missing??? Maybe vehicle tax advantages? Can't work it out.

 Could Possibly be less vans coming in to the country because brexit and covid slowed down the amount being imported.Their were people who had brand new Fords on order and their delivery date kept being delayed and pushed back some buy months.This then prompted some to cancel orders and buy nearly new and pre owned .This would then push up the second hand market up.

 

[Master Jedi Alejandro]

i love the GTDs.......i also used to have a mark 5 GTI.......ive never had an automatic so i thought id try one...i can also fit my drum kit in the boot with the seats down no problem but i wont be playing any gigs anytime soon with this ruddy virus about!

My last few cars have been DSG. Love it! Especially good after a busy week on the windows, jump in the car and it’s so relaxing to drive! 
 

Hope you enjoy the new GTD. I’m very envious of you ?

 

[dazmond]

Not if you look around.I know second hand vans are holding up well but new ones aren't that much.

There is one on auto trader like yours brand new facelift  lwb transit connect limited all the extras in silver priced at £16500 + vat

I'm not knocking you.You're happy with the agreement but your wasting your money leasing vehicles.

It has never been cheaper to borrow money than at this present time.A bit of deposit and the same term you would have owned the van out right by now for similar monthly payments with no ballon.

You could have then sold the van yourself for say 8k-9k got a loan for 10k over 4 years paid around £220 a month possible less and got another new one and owned it.Keep it for 5 years have a year of no payments then sell it and repeat the process.

Long term you own something but you also save yourself money.

their all £25-£26k the same spec and model as mine!i certainly cant find any at £16.5k!.....even if i did after VAT its only roughly what ill have paid for mine after ive paid the balloon payment.

at the time(jan 5th 2017) my oil pump went on my old van.....it suited me to get a van quick....i had a brand new van on my drive within 4 weeks......

 

[Cleanco]

Because if I dont sell the van I cant get out of the lease contract....once I sell it and pay the balloon the contract ends...

I then buy the van off my girlfriend once she gets the logbooks....

The van is now mine.....??

Ahh right. I’ve never bought a vehicle that way and thought once you’ve paid the ballon payment the vehicle was yours. How is that anything to do with hmrc as your not evading tax. Just conning  the finance company into owning a vehicle that that you’ve paid for anyway. 

Because the finance house will not allow him to register the van in his name when he completes the lease. By law they have to ensure and then prove that the new owner doesn't have anything to do with @dazmond's business if investigated - that is not a tax fraud. They will want to know the exact details of the new owner the van is being sold to and what this person intends to do with it. They will also ask what the relationship is between the 2 parties. Its all got to be logged in case of a future investigation by the tax authorities.

Bear in mind that there aren't that many finance houses. It pretty easy for the receiver to ask for lists of sole traders/small business as these would be the ones most likely to flaunt the rules.

Is there a legal reason why they do this or is it just something they have put in place there selves to try and keep you locked into a rental?

 

[Cleanco]

So you buy a vehicle, pay the monthly payments plus the ballon which would equal what you would have paid on finance anyway just spread out differently and then you are still not the owner but also have to find a buyer for it within three months? Think I’d do the same if I was dazmond the robbin tw4ts.    I nearly bought a car on pcp but think I’ll stay away for now. What if you can’t find a buyer? Do they come and reposes a vehicle they in hindsight you have paid for in full? I think that sort of deal is suited to someone who wants low monthly payments and is willing to change vehicle every four years without owning it. What would you do about bolting a tank through the floor cutting parts of it out when you don’t and never will own the vehicle? 

 

[Iron Giant]

 I nearly bought a car on pcp but think I’ll stay away for now. What if you can’t find a buyer?

PCP is different you own the car at the end if you pay the balloon payment and you have 3 different options as to what to do with the car at the end of the term more info here https://www.thecarexpert.co.uk/options-the-end-of-your-pcp/ 

With leasing they have you over a barrel as they ideally want the lease motor back more so if it's under mileage and well looked after as it's profit for them when it gets auctioned,  ideally they also want you to get another motor on lease.

 

[spruce]

Ahh right. I’ve never bought a vehicle that way and thought once you’ve paid the ballon payment the vehicle was yours. How is that anything to do with hmrc as your not evading tax. Just conning  the finance company into owning a vehicle that that you’ve paid for anyway. 

Is there a legal reason why they do this or is it just something they have put in place there selves to try and keep you locked into a rental?

Simply, yes. Its set in finance law by the Receiver. Its a 'blanket' regulation that covers all lease agreements.

Lets try to explain.

I lease a van from the finance house. I pay my initial rental (deposit) and then the required monthly payments over the term agreed. The deal I had with the finance house was that there was no balloon payment at the end.

I claim my monthly payments against tax as I'm a business owner. Lets say I only claim business usage for the van. Because there is no balloon payment I have basically claimed the complete lease value of the van against tax.

If I hand the van back to the finance house they will then dispose of it. That van still has a value.

If I could buy it back for its book value and continue to use it in my business I could then claim the purchase price of the van against tax. In effect I'm claiming tax twice against the same van. Hence the reason for the regulation. This is why they say you 'can't have your cake and eat it too.'

Leasing has evolved since the regulation was introduced and become much more complex over time - balloon payments for example. The motor trade have simply used it to promote sales. Unfortunately there are unscrupulous sales people in the industry who will say anything to get a sale.

 

[Part Timer]

If I could buy it back for its book value and continue to use it in my business I could then claim the purchase price of the van against tax. In effect I'm claiming tax twice against the same van. Hence the reason for the regulation. This is why they say you 'can't have your cake and eat it too.'

But surely the lease company would pay the tax on the sale of the van back to you. HMRC wouldn't be any worse off.

You, as a business, have paid for the van twice and therefore should be able to claim back.

If the van is sold to a different person they will be fully entitled to claim for it and the next owner and the next till the van is scrapped.

 

[spruce]

But surely the lease company would pay the tax on the sale of the van back to you. HMRC wouldn't be any worse off.

You, as a business, have paid for the van twice and therefore should be able to claim back.

If the van is sold to a different person they will be fully entitled to claim for it and the next owner and the next till the van is scrapped.

This is true. What the receiver has legislated against is the same person/business having a double slice of the claim/write-off cake on the same van. There are all sorts of things happening behind the scene here.

The lessor is claiming his monthly repayments against tax. The finance house will also claim against tax for the same van as its a depreciating asset on their asset register. The payments the lessor is making to the finance house is also effecting that depreciating asset's tax liability.  Some leases are off balance sheet and some are on balance sheet depending on the lease. Not having an accounting background doesn't make understanding the complexity of tax implications easy for me. (I'm sure I've read somewhere that there has been recent changes to the Receivers regulations on what is an asset and how business assets can now be dealt with tax wise.)

Whether that legislation makes sense to us or not in our particular case, we have to follow the Receiver's regulations which simply say we can't own the van we originally leased.

There are numerous other finance packages on the market that do legally allow ownership with a final balloon payment. If a leased van is registered to the lessor's name (Joe Bloggs) at the very start of the lease then that van can be owned at the end of the lease providing the payments are completed unless the lease's small print says otherwise. If the van is registered to a finance house then it will more than likely fall under the Receivers regulations at the end of the contract.

Anyone entering into a lease must fully understand what they can and can't do at the end of the lease. If a salesman says that you can sell you van to a family member and buy it back from them later is advising the buyer to break the law. The salesman will deny saying that and the responsibility will fall on the person who has made the transaction.