Hire purchase, lease, cash for a car?

weeyinathame

Hi

Having paid cash for cars to date as we were brought up with owning rather than loaning cash for purchases. I am now self employed and wondering whether you are best to loan, hire purchase or pay cash for a new or second hand car. My here doesn't seem to be a one stop shop to help out which option is best! Considering a skoda octivia 4wd?

thoughts appreciated

Thank you

flashg67

The best option isn't always the same for everybody - some useful info here - http://www.bvrla.co.uk/Business/Guide_to_vehicle_funding.aspx

HappyMJ

weeyinathame wrote: »

Hi

Having paid cash for cars to date as we were brought up with owning rather than loaning cash for purchases. I am now self employed and wondering whether you are best to loan, hire purchase or pay cash for a new or second hand car. My here doesn't seem to be a one stop shop to help out which option is best! Considering a skoda octivia 4wd?

thoughts appreciated

Thank you

Self employed you say. For tax purposes you could hire the car through a hire purchase agreement in which all payments would be a tax deduction....but then you wouldn't own the car. If you have the cash I'd buy it with cash and claim a mileage allowance. 45p first 10,000 miles then 25p....but then...you wouldn't have the cash. If you could buy the car on finance and the interest rate was low enough then that may be another option allowing you to keep your cash and gap insurance would cover any loss to the finance company if it were to be written off and it's value did not cover the outstanding loan....too many options...

knightstyle

We did it on a 0% credit card for 13 months, cost 3% to set up, there was a bit not paid back at the end so we transferred it to another card for 2.8%. Much cheaper than finance but don't know the tax issues for SE.

Hintza

The real question you have to answer honestly is:-

Will self employment work for me and if it doesn't how will I pay for the car.

If I was doing this I would be talking to an accountant for his thoughts on how best to buy to minimise tax.

weeyinathame

Thanks for the input so far. Been self employed for 2years and claiming fuel and the vat as the car has had about 20pc non business use. Accountant didn't seem to know the answer which worried me, so trying to find a business advisor. Bizarrely I advise businesses on many things, but this isn't my area. I'm thinking the hire purchase option atm but until I understand fully the pros and cons (hence the post here) then speaking to the right person is the next best thing.