Sole trader _ buy or lease next car?

M

mark58

Guest
I have started a business as a sole trader recently.

Will need to replace my car in the next year as I am now driving my five year old ex company car (redundancy).

Does anyone know if it would be worth my while financially leasing rather than buying the next set of wheels.

Thank you, m.
 

Brendan Burgess

Founder
Messages
40,231
As a general guide, you are better off buying your car. As a business, you need to be flexible. You may have a 5 year lease and need to change your car in three years. You end up taking out a new lease for 5 years. It's very difficult to break the leasing cycle. Or your business may do very well, and you can afford to pay it off early. Or you remortgage your home and can borrow at 3% instead of the 10% charged by the leasing company.

Brendan
 
M

mark58

Guest
Re: Sole trader's car

Brendan, thanks for your helpful reply.
 
Y

Yoda

Guest
Sole Trader's Car

In a similar situation.....

Maybe I misinterpret this but, I'll ask a related question.... is there an advantage in buying the car through your business rather than personally... I expect you can use "before tax money" through the business, and then write off depresiaton, you have to weigh this against the BIK implecations.

Any thoughts ?

Yoda
 

Brendan Burgess

Founder
Messages
40,231
Re: Sole Trader's Car

You have to simply do the calculations, but any time I have done the calculations, you are better off providing the car yourself and charging the company mileage which is around €1 per mile at present I think.

Brendan
 
Y

Yoda

Guest
Re: Sole Trader's Car

Anyone got a nice spreadsheet I could use.....???

Thanks...
 
C

Car Driver

Guest
Question

Hmmm! I thought claiming mileage rates were only available if you were signed up as a business rather than as a sole trader. I thought a sole trader made a claim for car use under "self assessment" rather than fixed mileage rates?

Would anyone be kind enough to elaborate?
 
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