Can u make advance payments on business car lease?

[kryten22uk]

I'm going to be getting a new business car lease. Its a 24mth deal, but for tax reasons I want to get as much of the lease expense done in this calendar year which ends June. I know I can increase the upfront amount, but from what I've seen, the upfront amounts only go upto 12mths; i.e. 12+23. So that would still mean I'm only forward-paying one third of the lease value, with 2 thirds still being settled over time (and hence in next years accounts).

I will ask the finance company whether they can increase the upfront payment, to like 18+23, or even 24+23 or more! Anyone done this before?

If not, my other idea was to get a standard 12+23, and then try and pay off the remaining +23 upfront as soon as the lease goes live, or indeed as much as possible. Anyone know if it is possible to make advance payments towards lease monthlies?

[IJWS15]

If your business pays upfront it would need to reflect that in the accounts.

[kryten22uk]

IJWS15 said:

If your business pays upfront it would need to reflect that in the accounts.

What do you mean 'reflect'? Any car lease has an upfront payment, 1/3/6/9/12 mths payment upfront. But I thought this gets treated as an immediate expense in the same way as any of the regular subsequent monthly payments? No special treatment. Wouldnt this be the same approach for any other non-level payment profile over time too?

[Mr Overheads]

kryten22uk said:

IJWS15 said:

If your business pays upfront it would need to reflect that in the accounts.

What do you mean 'reflect'? Any car lease has an upfront payment, 1/3/6/9/12 mths payment upfront. But I thought this gets treated as an immediate expense in the same way as any of the regular subsequent monthly payments? No special treatment. Wouldnt this be the same approach for any other non-level payment profile over time too?

Unless lease payments have a special tax treatment, you are confusing cash and accounting entries. Prepayments will go on the balance sheet not p&L

[blue_haddock]

I've formerly been a leasing broker and also worked for a lease company direct.

In my experience most of the finance companies can either do XX months upfront or a cash figure not related to how many months, so if the lease is usually 3 + 35 you could instead do £5000 + 35 which would massively reduce the monthly payments.