Lease vs personal PCP and mileage

[washed up contractor]

If you lease a car, you must be prepared to pay charges for work over and above 'fair wear & tear.' The conditions should be in the lease but you can get an idea from the british vehicle leasing association. They contend an average charge to customers handing their lease car back of around £900.

If the vehicle has more than 2 small dents on any one panel, chargeable. If the vehicle has any scratch more than an inch long on any one panel, chargeable etc. A favourite is damage or scratches under the fron splitter or valance where people park nose onto a kerb etc.

Similar actually applies when you hand a car back on a PCP. Some people say they've never had such charges. good luck to them. Everyone I know who has handed a car back, has had them.

I expect it will get far more common especially with people wanting to get out of diesels due to the current hysteria and, the car's value being a lot lessthan the 'balloon' that was due at the end of the term.

Be very careful if you intend taking on a financed car and intending handing it back instead of keeping it.

[Naylz82]

Thanks for the advice from all.

Re insurance, not too much of an issue for me, I run other vehicles in the household therefore ncd can be used on other vehicles rather than lost.

Re the 'fair wear and tear' policy, I appreciate they will look for anything to charge me on and fully expect that, however unless I am missing something the savings through leasing a very low co2 emmiting vehicle through the business look massive to my current situation.

[northernladuk]

I'd run it past your account first before getting too giddy.

[Antman]

I'd run it past your account first before getting too giddy.

Does the missus say that as well?

Soz, I couldn't resist

[cojak]

And make sure that you put proper security in place and DON'T part-ex your old car if it's more than £5K in value...

[ContrataxLtd]

I find this a bit incredible but it appears it's possible. It seems Direct Line aren't that bothered about the registered keeper or something. I don't get how the money would be paid to you if you write it off when it's a company asset though. Very strange. As I say after a brief scan it appears to be possible but I'd be looking in to that in a lot more detail if I was about to do it.
Doesn't sit right at all and there are many areas where what is allowed by the insurer isn't by HMRC. That classification of what a van post earlier in the week is a good example.

This is definitely possible, I've done it myself as it worked out much cheaper to keep a personal policy with associated NCB then take out a policy in the company name. You do have to ensure the tax treatment is done correctly though, normally the payment has to go through payroll and TAX/NI deducted accordingly as the company is effectively settling a personal liability (the insurance premiums) but sometimes just via the P11d as a BIK.

Martin
Contratax Ltd