Personal Contract Purchase (PCP) - In Brief
Why lease instead of buying
There are several potential advantages of leasing a car compared with buying it. These include lower cost, conserving capital, less maintenance, avoids disposal costs and problems.
Disadvantages
The main disadvantages of leasing are that you need to estimate your annual mileage, you will be required to have fully comprehensive insurance and you may need to plan your replacement vehicle in good time, as there may be some inflexibility at the end of the contract period.
Advantages
If you use Leasing Qote there are some unbelievable bargain deals when leasing a car. If you are prepared to be slightly flexible, it can cost about half as much to lease a car as to own it.
Advice For Companies
Companies, particularly VAT registered businesses should find leasing ideal. Most companies can reclaim half the VAT on their leased vehicles, and this generates an automatic advantage compared with buying, as VAT on cars is not generally reclaimable.
Leasing conserves cash flow, and is particularly helpful for younger and expanding companies. It also helps the company because the total ownership costs are easier to quantify and predict. Because leased or contract hired vehicles use off-balance-sheet financing, they help companies balance sheets to look healthier.
Advice For Individuals
Most individual will not be able to benefit from reclaiming any of the VAT chargeable on the lease, however this does not really penalise them because VAT on the vehicles themselves could not be reclaimed, leaving the individual no worse off. Some contract hire deals are available only to companies, others are open to all, subject to credit status.
There are several potential advantages of leasing a car compared with buying it. These include lower cost, conserving capital, less maintenance, avoids disposal costs and problems.
Disadvantages
The main disadvantages of leasing are that you need to estimate your annual mileage, you will be required to have fully comprehensive insurance and you may need to plan your replacement vehicle in good time, as there may be some inflexibility at the end of the contract period.
Advantages
If you use Leasing Qote there are some unbelievable bargain deals when leasing a car. If you are prepared to be slightly flexible, it can cost about half as much to lease a car as to own it.
Advice For Companies
Companies, particularly VAT registered businesses should find leasing ideal. Most companies can reclaim half the VAT on their leased vehicles, and this generates an automatic advantage compared with buying, as VAT on cars is not generally reclaimable.
Leasing conserves cash flow, and is particularly helpful for younger and expanding companies. It also helps the company because the total ownership costs are easier to quantify and predict. Because leased or contract hired vehicles use off-balance-sheet financing, they help companies balance sheets to look healthier.
Advice For Individuals
Most individual will not be able to benefit from reclaiming any of the VAT chargeable on the lease, however this does not really penalise them because VAT on the vehicles themselves could not be reclaimed, leaving the individual no worse off. Some contract hire deals are available only to companies, others are open to all, subject to credit status.
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