Van Purchasing

I've been looking at how much its cost me to keep my van on the road this year (51 plate transit), and its been nearly 1k in just things that have gone wrong, gearbox, alternator, sump gasket, and its still not sounding the healthiest. I think the cat is rattling and damaged.

I was wondering how you guys all buy your vans, be it outright new or used, lease, finance new or used? I could afford about 3k and buy a newer van out right probably a vivaro,traffic,etc on a 54ish plate, but I don't want to be spending a couple of k's on it again. So was thinking of finance, and getting a van around 6-7k probably still a vivaro etc but on an 08 plate low mileage.

Thoughts?

I chose outright used as me dads a mechanic and I'll only buy from auction as I have done all my life. Always bought from auction and never sold a car at a loss.

My accountant tells me that for a Ltd. Co. that contract hire is the most cost effective option.

Thus I have selected lease, which was the nearest I could see to this.

---------- AUTO MERGE Post added at 16:14 ---------- Previous post was at 16:13 ----------

I have more than the required capabilities to maintein used vans, however I NEED to have a reliable vehicle to meet my customers expectations, not turning up at a job when promised could cost me more than the van repair!

It is true that for a Ltd co contract hire is the best way to finance. In a previous life I was an asset finance manager specialising in C/H and this was by far the best way to fund a new vehicle.

my van was bought new. i would never hire/lease a van. i have too many modifications etc to it

Personally I don't do credit any more..

So it was "Outright Used" for me

My accountant tells me that for a Ltd. Co. that contract hire is the most cost effective option.Thus I have selected lease, which was the nearest I could see to this.

---------- AUTO MERGE Post added at 16:14 ---------- Previous post was at 16:13 ----------

I have more than the required capabilities to maintein used vans, however I NEED to have a reliable vehicle to meet my customers expectations, not turning up at a job when promised could cost me more than the van repair!

Click to expand...

Can you show us your accountants calculations to support this statement?

The truth (or otherwise) of the statement depends upon the parameters that are set. If a company must have new vehicles and only keep them for max 3 yrs then contract hire probably is the most cost effective solution.

However, for an individual the most cost effective way to own a vehicle is to buy used (as new, good condition and as low mileage as you can afford) and then keep it for as long as possible (until it drops or becomes uneconomic to repair). This way the initial outlay is minimised (someone else is taking the initial "big hit" on depreciation) and the ownership costs are spread over as long a time period as possible (the vehicles market value will drop to a very low value long before it ceases to become a good vehicle).

The problem with buying outright, whether as an individual, partnership or Ltd. Co. is that you cannot offset all of the purchase price against tax, untill you dispose of the vehicle.

In the first year you are allowed 40%, and in subsequent years 25% of the remainder.

Whereas when leasing, or on contract hire, all of the cost can be offset against tax.

yes I've heard that before spin, so what applies when buying on finance??

It is the same, just more complicated.

You create a pool which consists of your initial deposit, and then add the monthly payments to the pool. You then claim 40% of what is in the pool the first year, and 25% in subsequent years.

However if you use the type of finance where the vehicle doesn't belong to you untill after a final payment is made. You cannot claim anything untill after that payment is made, and the vehicle belongs to you.

On the other hand, with low carbon emission vehicles you can claim the whole amount, irrespective of how you purchase them. I don't know which vehicles qualify though.