Business Car Leasing for a young company?

[lumencreative]

We're a young ltd company, incorporated in May 2014, and are at the point where we need to get a car for company use. I have looked at what's available on the used market but a new car on a business lease would be better.

My question is, how difficult is it to get a business lease for a company with only one year's worth of trading? We're not looking at super expensive cars - about £150 per month, so affordability isn't an issue.

Thanks

 

[john1989]

May need a personal guarantee. Best to enter discussions directly with suppliers to find out their needs as it may differ between suppliers.

Have you thought about the tax consequences of having the car inside the company?

 

[lumencreative]

May need a personal guarantee. Best to enter discussions directly with suppliers to find out their needs as it may differ between suppliers.

Have you thought about the tax consequences of having the car inside the company?

Thanks, I have just spoken to one lease company actually and they require 2 years worth of trading history so they're a no go. Wonder if that's standard across the board?

I have considered the tax consequences, however, admit I am finding it somewhat confusing, so have asked our accountant to explain. It's worth noting though, that I currently work full time elsewhere and get paid via PAYE, so don't take a wage from the company, so if I were to get a company car, that would be the only money I take from the business.

 

[john1989]

Probably. Lending is risk based and a company with little over a year of trading is risky business.

You could get a personal lease and charge any business miles to the company @ 45p per mile up to 10,000 miles and 25p per mile thereafter. The mileage rate covers all running costs and not just the leasing costs.

Your accountant is placed to advise you though as they have all the facts to hand.

 

[lumencreative]

Yeah, this echos my thoughts really. I don't want to go down the route of a personal lease then charging the business for mileage and not sure my credit rating will stand up to it anyway.

I have read about non status car leasing but struggling to find a provider that advertises their prices online and don't really want to go through an application just to get an idea of what the monthly payments are likely to be.

 

[Ian J]

Some non status pricing infor on this site http://www.nationalvehiclesolutions.co.uk/no-credit-car-lease but note there is a difference between poor status and lunacy lending

 

[lumencreative]

Some non status pricing infor on this site http://www.nationalvehiclesolutions.co.uk/no-credit-car-lease but note there is a difference between poor status and lunacy lending

Crikey, those prices are a bit much, however, they are for 12 month leases so wonder what they would come down to for a longer lease.

 

[Ian J]

I have no idea as I'm with the majority who find it more cost and tax effective to buy their own car and charge mileage to the company

 

[Lease4Less]

If you have got 1 years accounts and they are reasonably healthy there are finance companies that will look at the application.

A lot will depend on the vehicle you are looking for, and your personal credit history.

If for example you have a net worth of 15K and are looking for a 40K car then its unlikely you will get finance.

Equally if you have a poor personal credit record it will not help as @john1989 mentioned you would potentially have to provide a personal guarantee.

 

[MyAccountantOnline]

I would certainly take some advice from your accountant before proceeding but a company that may be able to help is Lease World.

 

[lumencreative]

Thanks for all the advice.

Just an update, I actually decided that I'm not going to go down the route of leasing a car. Looking at various cars for sale, I can buy a 2010 Vauxhall Insignia for about £4k so thinking of going down this route and charging the company for business miles as suggested above.

 

[Luke Redman]

It is worth not note that when purchasing a vehicle for your company even though you think the cost of the vehicle is not important in accessing funds in the future it is. If you buy a vehicle that is deemed expensive it can look like an overspend on discretionary spending which can bring down a rating on a management risk.

 

[cheshire123]

Our business only has net worth of £6k as all profit is taken out for other ventures and I managed to get a £40k BMW on business lease - the credit was approved in minutes. 5 years trading history.

Not the case that personal cars and charging mileage to the company being the most efficient any more!

Also worth considering if you need to use your personal credit rating for anything in the near future, such as mortgage etc... as affordability rules will take into account your PERSONAL requirement to meet the monthly lease payments.