Toyota Avensis Contract Hire Nightmare

mj2000uk

Hi Guys and Girls

Some may have seen my last thread regarding my Toyota Avensis and being 10 months into a contract hire agreement of 3 years.

Basically I wanted to get rid of the vehicle back to Toyota but they would not let me return it without paying them 6.8K.

Well after lots of advice and lots of emails, the result is that there is no way out of this agreement. The fact is that you cannot just return a vehicle without an amount of financial loss.

In the end, I negotiated the 6.8K down to 4K but thats as low as they will go.

Contract hire was a really bad experience for me, I would advise anyone against it, I dont see how it can benefit anyone.

Cheers

Mike

jjames_3

Thanks for the update (I think you posted this over at HJs a few weeks ago as well didn't you?).

This has finally convinced me that contract hire is a bad idea. I was beginning to be swayed by the idea of a new car every three years but quite honestly I think I'll stick with my "buy a car for £5000 every three years with cash saved over the term" idea. At least this way you never owe anything, and can sell the car any time at a reasonable loss.

If it's any consolation I doubt you'd have been any better off buying the car new either.

Han_naH

Contract hire is the most popular way businesses buy cars.
So if you are a small co. Director or self employed, it is most efficient because half of the VAT on the payments is recoverable by VAt reg. businesses.
Secondly, the car is "off balance sheet". This means you claim the payments against Corp Tax instead of the slow 25% depreciation on the company's own asset.

So for private buyers, choose a finance lease or similar, with the options to settle the agreement, give back at the end of the term or setup a new lease.

For business, CH is best.

Sorry guys!