Pay cash or finance £55k?

[AC123]

The initial message was deleted from this topic on 27 August 2019 at 17:10

[Duncan_autoshine]

Hi,

I did exactly this with a disco 4 commercial in 2015.

It served me well, from memory I put vat down and then a further 10k then had the rest on a 4 year pop.

The beauty is you can still claim the full cost price from your Corp tax if you wish even though you haven't actually paid the amount yet, this is as long as you will own the vehicle at the end of the finance deal, so no lease deal.

It worked well for me as that car hardly suffered any depreciation over 2.5 years but the disco 5 seems to be suffering a lot so you will have to factor that into your plan, from my research a disco 5 is going to suffer about 10k per annum so its significant.

The only other thing I'd advise is you should get a much better rate of 8.5% on a new vehicle, 5.5 is achievable from main dealer.

Love the disco 5 though so if you can make it work then go for it.

Duncan

[C Lee Farquar]

AC123 said:

I can’t get a decent rate because of the discount I’ve already got on the vehicle, and the business it’s being put through is under 2 years old so a bit of a risk for them.

If the 'discount' is conditional on taking their finance then won't you lose that if you pay cash?

As said above the interest rate is high, only you can answer whether it's worth 5k to keep your cash liquid.

[AC123]

Finance rates of 5-6% are better than their “standard” rates apparently. And if discounting a vehicle heavily, they won’t deviate off those standard rates. It is available for cash which is what I’m thinking of doing. Suppose I can always sell it if I need cash quickly.