Car leasing - experiences?

Car_54

https://forums.moneysavingexpert.com/discussion/comment/82156582#Comment_82156582

but VED is paid by the registered keeper, who is not necessarily the owner.

paul_c123

https://forums.moneysavingexpert.com/discussion/comment/82157477#Comment_82157477

Was it an Agility lease? There was a legal ruling on these, surrounding the definition of a lease, it might be why Mercedes put the lessee as the registered keeper on the V5 unlike other firms. Here is a reminder of the case:

2. The HMRC v. Mercedes VAT Lease Case (Historical Landmark)If you are thinking of a ruling specifically focused on the definition of a lease, you are likely remembering the famous Court of Justice of the European Union (CJEU) case (Commissioners for Her Majesty's Revenue & Customs v Mercedes-Benz Financial Services UK Ltd). [1]

• The Dispute: HMRC argued that Mercedes' popular "Agility" lease-style agreements (which give customers the option to buy the car at the end via a optional final balloon payment) should be treated as a "supply of goods", meaning all VAT had to be paid upfront. Mercedes argued it was a "supply of services", meaning VAT should only be charged on each monthly instalment. [1, 2]
• The Ruling: The court ruled in favour of Mercedes. It decided that a lease agreement is only a supply of goods if purchasing the car at the end is the only economically rational choice. Because Mercedes customers genuinely had the choice to walk away, it was classified as a service, offering massive cash-flow advantages to leasees and the automotive industry. [1, 2, 3, 4, 5]

Arunmor

https://forums.moneysavingexpert.com/discussion/comment/82157552#Comment_82157552

No it wasn't that. The car would have been an 07 plate and the first thing I knew about it being my resposibilty was the VED demand through the post. Of course I should have been more alert, I suspect all the advice on places like this said VED was covered by the company. I learnt a lesson that day.

Bandy2023

https://forums.moneysavingexpert.com/discussion/comment/82157527#Comment_82157527

I can't help your misunderstanding of leases.

You're hiring THEIR car, it's never yours.

Bizarre alleged cases from many years ago or not, 99.9999% of leases include the VED.

PCP is different, you pay the VED there.

Car_54

https://forums.moneysavingexpert.com/discussion/comment/82159235#Comment_82159235

Where did I say otherwise? And what makes you think I don't understand leases?

Bandy2023

https://forums.moneysavingexpert.com/discussion/comment/82159342#Comment_82159342

This is what you said in a thread about LEASING.

"Don't forget the 'luxury car tax' (VED) for years 2 to 6. Check whether that is part of the payment"

Why would you check VED is included in a LEASE car?

It is, it's their car.

UncleTomCobley

For what it's worth - PCP is a form of hire purchase (see here https://www.financingyourcar.org.uk/car-finance-products/personal-contract-purchase-pcp%29 and, as per leasing, a car here also belongs to the finance company. For PCP/HP, ownership changes if and when the final payment is made (see here https://www.cinch.co.uk/guides/car-finance/who-is-the-legal-owner-of-a-car-on-finance)..

Further, what what it's also worth, from experience some lease companies will also allow the car to be, in effect, bought at the end of the lease (via a third party - a friend etc).

As such, with regards to the Road tax/VED, as #Car_54 noted, the ownership in itself doesn't matter, it's the regestered keeper that pays. Typically for hire/lease this is the lease company, which can be annoying on occasions - eg when disputing parking charges etc.

Bandy2023

https://forums.moneysavingexpert.com/discussion/comment/82170203#Comment_82170203

Of course who owns the car matters for VED

I'd no more expect to pay VED on a lease / PCH car than I would a holiday hire car.

It's the same thing, you're just hiring it for longer than a week in Spain.

PCP is different because it's your car, albeit financed.

You're literally free to sell a PCP car at any time, you have the V5 to transfer to a new owner ( you have to settle the finance of course)

You don't have the facility to sell a lease / PCH car.

UncleTomCobley

Hire purchase agreement or personal contract purchase (PCP) agreement

You hire goods by paying in instalments. Then, at the end of the
agreement, you can make the final payment (sometimes known as the
balloon payment or guaranteed minimum future value) and become the legal
owner of the car. If you don’t want to take ownership of the car then
you won't pay the final instalment and can return the goods.

https://www.financial-ombudsman.org.uk/consumers/complaints-can-help/credit-borrowing-money/car-finance

ch3shirecat4

I'd definitely shops around before committing, especially on a £60k car! Streamline car finance I've heard could be good for comparing quotes. The total cost over the 3 years is what I'd be looking at rather than just the monthly payment