How would you finance this purchase?
Discussion
You need a taxi. You are VAT registered.
You must licence a car that is brand new, and you can run that car for a total of six years under licencing regulations.
You expect the vehicle to cover 150,000 miles in the first two years.
At two years, the vehicle starts to cost you considerably through downtime (maintenence, repairs etc). The resale value of the car is already, to all intents and purposes, zero.
You want to do better than HP over five years, with low deposit, although with HP you are able to claim 100% of the VAT back on purchase of vehicle.
What would you do? I'm looking into fully maintained contract hire over two years but it's fapping expensive because of the residual values involved.
What is the best way to churn fleet every couple of years whilst keeping monthly payments sensible?
Can anyone enlighten me as to the black and white reality of ditching a HP agreement at 50% repayments - I've heard it doesn't affect credit rating but that smells abit fishy to me. How does this work?
Sorry for all the questions
Hope some of you can give me a few ideas
You must licence a car that is brand new, and you can run that car for a total of six years under licencing regulations.
You expect the vehicle to cover 150,000 miles in the first two years.
At two years, the vehicle starts to cost you considerably through downtime (maintenence, repairs etc). The resale value of the car is already, to all intents and purposes, zero.
You want to do better than HP over five years, with low deposit, although with HP you are able to claim 100% of the VAT back on purchase of vehicle.
What would you do? I'm looking into fully maintained contract hire over two years but it's fapping expensive because of the residual values involved.
What is the best way to churn fleet every couple of years whilst keeping monthly payments sensible?
Can anyone enlighten me as to the black and white reality of ditching a HP agreement at 50% repayments - I've heard it doesn't affect credit rating but that smells abit fishy to me. How does this work?
Sorry for all the questions
Hope some of you can give me a few ideas
So it that the law nowadays? How the hell does anyone make a living as a cab driver? (unless he gets loads of airport runs)
I've just looked and say for instance a Skoda Octavia diesel is around 15 grand which with a loan over even 4 years is around £375+ then you have insurance and from what i here the insurance can be a killer. Then maintanance, fuel, radio charges, tax on profits etc.
Judging by the wrecks driving around my town, legislation must differ according to the area.
Now there seems to be plenty doing it so people are living doing this but god knows how.
I've just looked and say for instance a Skoda Octavia diesel is around 15 grand which with a loan over even 4 years is around £375+ then you have insurance and from what i here the insurance can be a killer. Then maintanance, fuel, radio charges, tax on profits etc.
Judging by the wrecks driving around my town, legislation must differ according to the area.
Now there seems to be plenty doing it so people are living doing this but god knows how.
I was a few years back looking at a Fabia VRs in a Skoda dealer, got chatting to the sales bloke and noticed a few ex taxi Octavias parked up, they were all moon and back mileage and all had been returned using the voluntary termination clause. I have no idea how it works in practice but I would guess it works much better if you either spread your loans through more than one finance company or are buying 1 taxi to run as a private owner driver.
No idea how it works when you run a business, is there no way of negotiating the kind of system car hire firms use and swap cars at lower fixed mileages?
No idea how it works when you run a business, is there no way of negotiating the kind of system car hire firms use and swap cars at lower fixed mileages?
A few years back you could terminate the HP agreement when you'd payed 50% of the value of the car back with no detrimental affect on your credit.
Not sure if you can still do this but i imagine if you found such agreement you'd have to find one without milage limitations ?
I know this is what my father in law did a couple of Chrysler Voyagers ago. They don't like you much when you return it.
Not sure if you can still do this but i imagine if you found such agreement you'd have to find one without milage limitations ?
I know this is what my father in law did a couple of Chrysler Voyagers ago. They don't like you much when you return it.
Why not buy one of the Korean brands with 5-year warranties and simply keep claiming on the warranty in order to keep the car on the road? Doesn't that start to make economic sense if the residuals are so poor at the end of the term? Or are the mileage constraints too great on such a deal?
Out of interest, why does the car have to be brand new?
Out of interest, why does the car have to be brand new?
skwdenyer said:
Why not buy one of the Korean brands with 5-year warranties and simply keep claiming on the warranty in order to keep the car on the road? Doesn't that start to make economic sense if the residuals are so poor at the end of the term? Or are the mileage constraints too great on such a deal?
Out of interest, why does the car have to be brand new?
Kias aren't that great to drive (12 hour shifts) and they aren't great on fuel.Out of interest, why does the car have to be brand new?
Licensing will allow a car up to three years old, but obviously then you don't get the warranty. Most manufacturers are 3 years or 60k. Skoda and VW are very good with a 2 year unlimited mileage warranty and are pretty fair with claims at high mileages, hence brand new appeals, plus you get the VAT back (I know you are ultimately paying the interest on a HP agreement, effectively 'borrowing' the VAT, but it REALLY helped cashflow when starting out.
Playing with some figures, it seems that we end up paying one way or another whenever a car is off the road. It doesn't seem to matter much if the car is in warranty or not - the vast majority of breakdowns are not warranty claims... Clutches, Brakes, Driveshafts etc.
With sensible deposits (2k), it looks like I can finance older cars over 2 years on HP and then when the payments are kaput I can keep running the car as long as it's legs carry it, and then will be free of loans etc should it become uneconomical to keep repairing.
I can have the cars wrapped for £600 a pop which will make them look brand new anyway, plus I won't HAVE to buy red ones (pain in the arse when it comes to factory orders).
So it looks like HP is still a winner, just need to forget the VAT cheque and start browsing the classifieds.
Cheers
Edited by KingRichard on Wednesday 24th March 19:28
KingRichard said:
Can anyone enlighten me as to the black and white reality of ditching a HP agreement at 50% repayments - I've heard it doesn't affect credit rating but that smells abit fishy to me. How does this work?
You can't do that on a business deal. Voluntary Termination is a consumer (ie private customer) credit thing.
Deva Link said:
KingRichard said:
Can anyone enlighten me as to the black and white reality of ditching a HP agreement at 50% repayments - I've heard it doesn't affect credit rating but that smells abit fishy to me. How does this work?
You can't do that on a business deal. Voluntary Termination is a consumer (ie private customer) credit thing.
2 or 3 year old Peugeot for £6k+ and about 60k miles.
Buy it for cash and write it down on the books over 2 years.
Scrap or sell for what you can get at 200k miles.
Most comfortable seats and bulletproof diesel engine.
It's always a trade off between paying as little as possible and reliability. New doesn't mean less downtime but it does equal less profit. 10 plate or 08, your punter won't care.
Buy it for cash and write it down on the books over 2 years.
Scrap or sell for what you can get at 200k miles.
Most comfortable seats and bulletproof diesel engine.
It's always a trade off between paying as little as possible and reliability. New doesn't mean less downtime but it does equal less profit. 10 plate or 08, your punter won't care.
Tyre Smoke said:
2 or 3 year old Peugeot for £6k+ and about 60k miles.
Buy it for cash and write it down on the books over 2 years.
Scrap or sell for what you can get at 200k miles.
Most comfortable seats and bulletproof diesel engine.
It's always a trade off between paying as little as possible and reliability. New doesn't mean less downtime but it does equal less profit. 10 plate or 08, your punter won't care.
True, although...Buy it for cash and write it down on the books over 2 years.
Scrap or sell for what you can get at 200k miles.
Most comfortable seats and bulletproof diesel engine.
It's always a trade off between paying as little as possible and reliability. New doesn't mean less downtime but it does equal less profit. 10 plate or 08, your punter won't care.
Just been offered new 1.6tdi Octavias for £10,200 including VAT. Probably going to go for 4 of them this time - stick a couple of grand against them, take the VAT this quarter and pitch in a swapper for about £1500. Should leave about £5k on HP which I'm happy with over three years.
Amazing deal. List price is £12700 for our spec, so that's a huge dealer discount. Take the VAT out and your only really paying £8500 for a brand new car.
Give your skoda dealer a bell mate.
KingRichard said:
Tyre Smoke said:
Not a chance! I paid little more than that for a 407sw SE 2.0
Do you get on okay with Peugeots then?We had 406's which were a NIGHTMARE!
They seem to buy them at 3yrs old and sell after 3yrs use.
paoloh said:
KingRichard said:
Tyre Smoke said:
Not a chance! I paid little more than that for a 407sw SE 2.0
Do you get on okay with Peugeots then?We had 406's which were a NIGHTMARE!
They seem to buy them at 3yrs old and sell after 3yrs use.
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