Buy, lease or PCP

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Fri 28 Jul 2006 21:18
Buy, lease or PCP - BobbyG
My friend is a director of a Limited Company. There are 3 employees,all of whom are directors.
She has had a Preg Civic since new and now wants to change for the new style Civic.

What are the pros and cons of her buying privately as opposed to leasing? Is there any tax benefits either way? What would be the implications if they decided to go down the company car road for all 3 directors?

This may well be one for their accountant to analyse but any thoughts from the backroom would be appreciated.
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Fri 28 Jul 2006 22:37
Buy, lease or PCP - adverse camber
It isnt totally straightforward, it depends on the mileage covered and how much is business.

Most of the lease companies have online calculators that show how things stand for an employee. just remember that as a director the alternative may be taking a dividend of the cost of the lease which would be a few k, before you look at the tax on having a company provided vehicle.

I always preferred to run my own car, I paid max ir approved mileage allowances and made a profit out of a saab and an audi. lost money on the svx and just about broke even on the porsche.
(but I did higher miles on the earlier cars, and the allowances were different).
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Fri 28 Jul 2006 22:40
Buy, lease or PCP - adverse camber
Ah - the thing that did it for me was that I bought better cars than I could justify having as company cars (personal tax based on purchase cost of car) but I always buy cars outright rather than finance.
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Fri 28 Jul 2006 22:59
Buy, lease or PCP - BobbyG
Interesting few points Mark, I don't think her business mileage will be that high as she lives in Scotland and most of their clients are in London so most of her commute is flying!
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