Buying a Lease Car at the end of the term

[fiisch]

I suspect I already know the answer to this, but thought I'd enlist the help of CUK to see if there is any way to help my elderly father.

He's retired and his mileage has dropped off dramatically. He's always had new cars, first as a salesman and a succession of 80s/90s sales saloons company cars, and then as a serial PCP/leaser. With his mileage dropping and some hefty bills forecast for next year, he's thinking of buying his existing lease vehicle rather than entering into a new agreement.

Currently owns an Audi A3 that he's very fond of, and has asked lease company about buying it. They have advised that they can only sell the car to a company with a registered company number, and not to an individual. I have suggested jacking in the lease and buying a lightly-used Octavia vRS (he needs something a bit bigger anyway), but he isn't keen.

1). I am assuming my ltd co cannot buy the car from the lease company and immediately sell it on to him without incurring significant tax liabilities - fair assumption? He called me with this suggestion, but I said I think it's a non-starter, but I'd look into it. (Ignoring the depreciation factor of adding two additional unnecessary registered keepers).

2). Has anyone been in a similar situation and found a way to buy their lease car? Was wondering if a local garage would buy it and sell it on in exchange for a small mark-up perhaps?

[northernladuk]

What type of contract is in exactly? I am guessing not a PCP as they usually have option to buy at the end?

Why would someone who's getting on want a vRS? Particularly if he's got a bog standard A3? Why not just go for another A3 seems he knows and likes the car?

My other half has had Aygo's on PCP for over a decade and her contract would give her a great deal compared to one off the forecort but I can't convince her to keep them when the contract is up. She also does low mileage and looks after them very well but sadly its continue with PCP's for us unless something changes in the mid to long term.

Why not get one more new one but on PCP or a contract that specifically lets you buy at a set price at the end? He'll have to contract for one more period but he'll know he's getting a car he likes at a good price for it's mileage at the end.

[WTFH]

This really feels like there’s a tonne of stuff not being honestly declared.

Does your dad have a personal lease contract with the leasing company or has he/you/whoever tried to put it through a “company” as a “business expense”?

If it’s a personal lease, most leasing companies will happily negotiate a purchase at the end of the contract. If there are other pieces of the puzzle that aren’t being mentioned (such as who signed the lease, who is paying the lease, etc), then that’s a different matter.
I’d not consider an Octavia vRS a “similar” car to an A3, which again would lead to the question of “what are you not telling us?”

[courtg9000]

This should be fairly standard if its a bog standard PCP - personal lease agreement.
I can't see the issue, unless its someone at the leasing co being a bit of a bell end.

Getting a garage to buy a particular vehicle at auction and then sell it on to you is fraught is problems. I know someone who tried it and it didn't work out well.
As for the Octavia. The VRs thing dosen't sound like a good idea. a 1.5 150bhp in SEL or better trim might be a better suit from a boggo A3. I know these Skoda's quite well and they are quick!

[courtg9000]

This should be fairly standard if its a bog standard PCP - personal lease agreement.
I can't see the issue, unless its someone at the leasing co being a bit of a bell end.

Getting a garage to buy a particular vehicle at auction and then sell it on to you is fraught is problems. I know someone who tried it and it didn't work out well.
As for the Octavia. The VRs thing dosen't sound like a good idea. a 1.5 150bhp in SEL or better trim might be a better suit from a boggo A3. I know these Skoda's quite well and they are quick!

[b0redom]

1). I am assuming my ltd co cannot buy the car from the lease company and immediately sell it on to him without incurring significant tax liabilities - fair assumption? He called me with this suggestion, but I said I think it's a non-starter, but I'd look into it. (Ignoring the depreciation factor of adding two additional unnecessary registered keepers).

Why are you assuming this? How is it any different from buying a laptop, deciding you don't want it and then selling it on? I mean it'd look a bit weird, but as long as yourCo isn't depreciating the asset, I can't see hector being upset?

What everyone else said though, I totally get that he knows the history of the vehicle etc so it's 'safer', but presumably you can get a similar or higher spec vehicle if you're prepared to shop around/wait for a bit. If it's reasonably new you'll probably even get a warranty.

[Snooky]

I'm not familiar with lease companies but what would they do with the car if it wasn't bought by the lessee at the end of the fixed term? I assume sell it on to some dealer or send it to auction. In which case can he agree to let the lease expire but ask them whether they'll then sell it to him?

[NickFitz]

1. Form a company with paid-up shares equivalent to the cost of the car;
2. Company buys car with money from shares;
3. Dissolve company, distributing assets to shareholder.

There's a bit of paperwork and some additional costs around company formation, but there shouldn't be much interest from Hector given that the company hasn't done anything that generates either profits or losses and the shareholder ends up essentially back where they started but with less cash and more car

[vetran]

1. Form a company with paid-up shares equivalent to the cost of the car;
2. Company buys car with money from shares;
3. Dissolve company, distributing assets to shareholder.

There's a bit of paperwork and some additional costs around company formation, but there shouldn't be much interest from Hector given that the company hasn't done anything that generates either profits or losses and the shareholder ends up essentially back where they started but with less cash and more car

HMRC would obviously view it as a "vehicle" to avoid vehicle tax?

[fiisch]

Thanks for the replies.

The car is on a personal lease, not a PCP (nothing to do with my ltd co - leased in his own name). It's on a 3 + 36 month jobbie, no balloon payment at the end etc., on the understanding you hand the car back and presumably lease another.

He's asked about buying it, and they're claiming they can only sell it to a company with a company number (which sounds odd to me, but apparently this is what he's been told). I do know there is no "right" to buy a lease car at the end of the term, so ultimately it's up to the lease company's discretion I suppose.

Re.: Octavia vRS - we like Skodas.

He loves VAG, but ideally could do with a bit of a bigger car - vRS has more toys/nicer looker so takes the sting out of dropping down the VAG hierarchy (we've both owned them before).