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+--- Thread: Cash .vs. Finance .v.s Lease (/Thread-Cash-vs-Finance-v-s-Lease)
RE: Cash .vs. Finance .v.s Lease - Daigriff - 10-10-2011 09:25pm
(10-10-2011 07:46pm)jiggyjaggy Wrote: But if you could take the £40k cash and invest it to give an approx 30% RoE (which gives you an additional £12k) then surely it is better to take the leasing option, as the leasing costs £17k, and you feel none of the depreciation.
Where will you get a "lowish" risk Investment over a shortish term that will return 30%?
Cash .vs. Finance .v.s Lease - gomark - 10-10-2011 09:26pm
Everyone with a business will have their own view, but the days of company cars are well gone as a tax perk. Benefit in kind is a killer. Typically having the car under a personal arrangement with claiming mileage allowance at say 40p per mile is typically the best method. Can look at schemes such as claiming as a pool car, but has to be justified if you have an inspection and should be left at work and not taken home (officially).
RE: Cash .vs. Finance .v.s Lease - jiggyjaggy - 10-10-2011 09:28pm
ha ha I think you are referring to my business USP aren't you? Now I couldn't tell you what that was otherwise everyone would be doing it.
It gives an approximate 25% RoCE, hence my reason for leasing so I can use the capital for my business etc.
Cash .vs. Finance .v.s Lease - gomark - 10-10-2011 09:39pm
The truth is the higher returns would most probably only be realised by anybody looking to reinvest into a business. Typical investments in 'high interest' bank accounts or FTSE shares are unlikely to see the same returns. That said, those investing into a business scheme are doing so with much higher risks...
RE: Cash .vs. Finance .v.s Lease - Daigriff - 10-10-2011 09:45pm
Sorry Jiggyjaggy I haven't got a clue what a RoCE is...lol. I run my own business, am fairly astute as far as investments are concerned and just want to check I'm not missing anything.
RE: Cash .vs. Finance .v.s Lease - jiggyjaggy - 10-10-2011 10:07pm
Sorry Typo, was trying to write Return on Capital. Fat finger syndrome! Long Monday I'm afraid. I was just saying that £40k (price of a Dynamic) would be more beneficial for me in my business as I do not have or need a high amount of start up capital, but that 40k returns me 20-30% return on capital invested, where as if I bought the Dynamic outright cash, I would not have that same amount to invest in my business.
I have looked around and on a business deal the best price for a 3 + 35 plan seems to be circa £560-600 pcm. Seems high, but its gets you a gorgeous car for 36 months
One question to those who have leased before. If I were to START leasing an evoque in approx 6 months/10 months time, would the monthly cost go down as the car with not be as new/exclusive?
Cash .vs. Finance .v.s Lease - gomark - 10-10-2011 10:22pm
Probably best in that instance to try and PCP an ex demo. The biggest depreciation will have happened and the financing of the depreciation will be smaller. Your main issues then is that you will be a second owner (but if you are looking to hand the car back, not such an issue) and you will probably compromise on perfect spec. That said you have the potential to sell the car for more than the final agreed payment amount and have a couple of grand to use on your next purchase...
RE: Cash .vs. Finance .v.s Lease - rchrdleigh - 10-10-2011 10:28pm
Glass' Guide which is used to set lease costs predicts 94% after one year and 70% after 3 years (eat your heart out BMW X3 owners). If Glass' are correct or nearly correct then the usual depreciation associated with a new car driving off the garage forecourt will not be applicable and I think ex-Demo vehicles will be sold at not far short of full price to someone who doesn't want to wait for a build slot and isn't too worried about exact spec.
RE: Cash .vs. Finance .v.s Lease - RadioHam - 10-10-2011 10:33pm
Golden rule of business:
"If it appreciates buy it, if it depreciates lease it"
Additionally for the self employed/business owners leasing will have obvious tax advantages.... so my accountant tells me anyway!
RE: Cash .vs. Finance .v.s Lease - jiggyjaggy - 10-10-2011 10:40pm
Scrap what I said earlier, I don't think I can wait 6 months to lease a car, and Im not wanting to put down £40 on a new one, purely as I can use the money for my business. Time to find out which leasing company can provide me a white Dynamic within 6-8 weeks! lol
Patience is definitely not a virtue! ha ha