Car - Lease, buy or privately owned

Rachel

Hello

A client has asked me the question whether it is better to lease, buy a car on behalf of the company (sole director Ltd Co) or whether it was better to buy personally.

Before I dive in to research I wondered if anyone else had done this recently and could point me in the right way.

Many Thanks

Rachel

slackda

From A Tax point of view i beilve that it is cheapest to buy the car as the company, then depricate get allowances and account for BIK, then sell the car to the director after year 2/3 at which point the director geta a bargain car (going on market value of course) and no profit on disposal of asset then flick over to a 40ppm payment option...

deanshepherd

It really depends on how much the director wants to spend on a car, what type of car they want to drive, whether they want to buy new or second hand and how much business mileage they are likely to do.

Typically, if they want a new, fairly economical car and don't do a huge amount of business miles then it could be better to put through the company.

If they are looking at buying a 'nice' car circa 3 years old or more and do a reasonable amount of business miles then they are probably better keeping it out of the company.

Too many variables to give you a definitive answer.

Rachel

Thank you for your responses.

Monsoon

deanshepherd wrote: »

Too many variables to give you a definitive answer.

Yep.

You need to do the maths for the specific car you want. I keep meaning to set up a spreadsheet where I can just drop the variables in and off I go... One day, when I have time!