Business - Leasing new vs Balloon Payment on Used
Discussion
Asking for a friend who would like a Merc ML350.
He has his own company, not LTD but it is VAT registered. He's wanting to lease a car for business and private use.
ML350 seems to be about £600 per month on a 2 year deal (which he'd prefer rather than being stuck on a four year deal).
As he's not totally against the idea of buying nearly new, and has the option to buy it privately if it's more efficient, is there a better way to do it?
I worked out that the 2 year lease comes to about £15K for two years, which doesn't seem bad at all compared to the depreciation of a brand new one, but is there a better option available that would keep the monthly to a similar or lower level? It seems that given most nearly new ML350s are £40K+, they would probably depreciate by more than £15K in two years (and hence work out more expensive than leasing new)
Thought I'd check on here before making a recommendation for him!
He has his own company, not LTD but it is VAT registered. He's wanting to lease a car for business and private use.
ML350 seems to be about £600 per month on a 2 year deal (which he'd prefer rather than being stuck on a four year deal).
As he's not totally against the idea of buying nearly new, and has the option to buy it privately if it's more efficient, is there a better way to do it?
I worked out that the 2 year lease comes to about £15K for two years, which doesn't seem bad at all compared to the depreciation of a brand new one, but is there a better option available that would keep the monthly to a similar or lower level? It seems that given most nearly new ML350s are £40K+, they would probably depreciate by more than £15K in two years (and hence work out more expensive than leasing new)
Thought I'd check on here before making a recommendation for him!
Morning, if your friend is specifically after a new vehicle then the contract hire option is by far the most cost effective route on the ML's with the enormous support that Mercedes are putting behind them. As he's a sole trader / partnership rather than an employee of the company, he won't be liable for company car tax.
I can give you options for both contract hire / and lease purchase, and happy to pm these through if you can let me know what mileage he expects to cover per year.
Cheers, Richard.
I can give you options for both contract hire / and lease purchase, and happy to pm these through if you can let me know what mileage he expects to cover per year.
Cheers, Richard.
Thanks Richard, yes if you could PM some details I'll happily pass these on.
He's looking at no more than about 10K per year, the shorter the lease the better although realistically it'll need to be over 3 - 4 years I imagine. I did show him some deals costing about £110 per month more for 2 years than 4 years, but he wasn't prepared to pay that much extra per month for the greater flexibility.
I guess he's fairly flexible about deposit, but I'd start at 3X, he does take a "total payable" view of the deal so isn't one to fall for the deals with apparently lower payments that require 6X or 9X deposit to make it work. If the total cost worked out substantially less then I'm sure he'd consider it though.
Can't remember if I said, be it must be the 350 diesel. Not sure if he's decided on an SE or Sport yet (coming from an RRS which is sublime I think he'd be better in an SE)
He's looking at no more than about 10K per year, the shorter the lease the better although realistically it'll need to be over 3 - 4 years I imagine. I did show him some deals costing about £110 per month more for 2 years than 4 years, but he wasn't prepared to pay that much extra per month for the greater flexibility.
I guess he's fairly flexible about deposit, but I'd start at 3X, he does take a "total payable" view of the deal so isn't one to fall for the deals with apparently lower payments that require 6X or 9X deposit to make it work. If the total cost worked out substantially less then I'm sure he'd consider it though.
Can't remember if I said, be it must be the 350 diesel. Not sure if he's decided on an SE or Sport yet (coming from an RRS which is sublime I think he'd be better in an SE)
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