Car for the company. Long-term rental? Leasing? Loan?
Summary: The discussion revolves around options for acquiring a car for a company, considering long-term rental, leasing, or credit. Multiple participants like equ-6678, ju4417, and berewini-0 are involved, though specific opinions or insights are not detailed in the content provided.
Hi,
I would like to buy a car worth around 100 - 120 thousand for a limited liability company that has been operating for 4 years and is not a VAT payer.
What are the best instruments in such a situation to finance the purchase? Operating lease involves VAT, which the company cannot deduct, so that leaves a loan or lease loan, or maybe you can recommend something else?
10 comments
damdeczk0
·6 months agoI’ll add something from myself, the pros of renting:
• all car expenses in one payment (insurance, servicing, claims handling)
• compared to leasing, for the same monthly fee we get a better car
• we’re not responsible for selling the car after the lease ends (and the selling process can be long and tedious)
• “peace of mind,” we don’t worry whether the gearbox or injectors won’t fail in the car any minute now
ari_724018
·6 months agoIf you can’t deduct VAT, the financing method doesn’t matter because you’ll make the purchase at the gross price anyway. In this case, in my opinion, renting is more advantageous than leasing.
berewini-0
·6 months agoIt depends on which car you choose. It’ll be best if you just go to the Masterlease website, and there you’ll have the installment amounts listed for specific cars.
equ-6678
OP6 months agoHonestly, I had heard about it before, but for some reason I hadn’t really considered it. How does it compare price-wise to leasing and buying outright?
berewini-0
·6 months agoA taxpayer is a natural person, a legal entity, or an organizational unit without legal personality that is directly subject to tax liability and bears the burden of paying the tax. The taxpayer is liable with all their assets for any tax obligations incurred.
A withholding agent is an entity that, in accordance with the applicable tax law regulations, is obliged to calculate and collect the tax from the taxpayer and then remit the levy to the tax authority within the specified deadline. It is important to remember to fulfill the tax obligation, as a delay may result in the tax authority issuing a decision on the withholding agent’s tax liability.
Are you not taking into account the long-term lease mentioned here? There shouldn’t really be a problem getting it, there’s not much paperwork. All the fees are included in just one installment, so you can plan your expenses far ahead for a long period.
equ-6678
OP6 months agoBy buying a car as a limited liability company that is not a VAT taxpayer, I don’t pay PCC (of course, a second-hand car), even with VAT margin scheme, and the prices are lower. I’ll admit that the option of lower installments would be more favorable in my case, but I’m considering all options.
berewini-0
·6 months ago1. There is no such thing as a VAT payer. The correct term is VAT taxpayer.
2. The fact that VAT will be added in leasing changes nothing. Any purchase will involve VAT, because VAT is added to the price of every car (unless it’s second-hand from a private individual, then you have 2% PCC). What’s more, VAT is added to practically everything, even when you buy parsley privately at a store (take a look at the receipt next time). The key thing is that taxpayers can deduct that VAT from business expenses (ask for a refund to your account, or not send the VAT to the tax office, which they themselves collect from customers).
So if you’re planning a big expense, maybe it’s worth becoming a VAT payer? That will mean increasing the price for customers. For companies it makes no difference, because they’ll deduct it anyway; for consumers it’s worse. So you need to calculate it. And the question is whether you’d rather put down a larger amount of cash upfront for the car? Or would you prefer installments?
ju4417
·6 months agowhen you price a car, it’s in gross amount after all.
her_737475
·6 months agoju4417
·6 months agoYou buy the car at the gross price anyway - so you might as well take leasing just like any other credit tool. From what I know, the easiest way for a company to get a long-term car rental is, you can check with masterlease on this topic