I KNOW I’ve gone on about this before, but personal contract purchase (PCP) and personal contract hire (PCH) can be very effective car finance products for small business owners – see our Special Report Personal Contract Purchase: does it work for you?
My wife and co-director of Business Car Manager has a delightful Fiat 500 on a PCP organised through Fiat and our brilliant local dealership – Parkside in Whitton.
Alison has been splitting her time between helping with the magazine and developing her own new business as an interior designer. And what more cutesy and designery than a Fiat 500 to visit clients?
Anyway, we pay under £140 a month for the Fiat – and reclaim any business mileage under the tax-free AMAP system of 40p per mile – you can read more on this in our Ask the Experts section, Do I pay tax on AMAPs?.
It’s simple, there’s less accounting involved – and let’s face it, there’s enough paperwork with a small business as it is!
Martin Brown from business car finance solution provider Fleet Alliance in his comment on the Personal Contract Purchase special report highlights that car dealers are more likely to feature these deals in the future. I’m sure he’s right in this.
For example, on my Audi A6 2.0 TDIe model there are some very good deals being supplied by Audi. There’s an Audi Solutions package – a PCP over 10,000 miles pa – with a monthly payment of £379 a month. The APR on this is just 5.3%.
However, it’s also worth considering the Audi offer for contract hire on the same car – just £329 a month.
Given the new tax laws, which mean all of the rentals can be offset against tax if the emissions are below 160g/km, that’s quite an effective method of driving a rather desirable car.
Should you want to know more about leasing and tax relief, read our Ask the Experts article If you are self employed are car leases fully tax deductible?. There’s some good advice in there.
And if you need any further help on choosing between a PCP or contract hire, then I’m sure Martin at Fleet Alliance will be able to help you out.
Flexible ownership options for your business car
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