Choose Car Leasing And Beat The Credit CrunchPosted on November 12th, 2008 by Nin
You can’t hide from it; it’s all over the news here in the UK… The Credit Crunch! House prices are falling but no one has the money to buy, all our house hold bills are rising but our wages are not matching the rise and to top it all off petrol prices have gone through the roof. The final blow came earlier this month when EurotaxGlasses, the industry’s premier vehicle valuation specialists stated that they expected used vehicle values to drop by up to 12 % between now and the end of the year. Meanwhile 4×4 operators could experience depreciative hits on their vehicles of nearer the 20% mark. With less money to lend, Banks and Finance companies are proving to be more difficult to borrow money from and when considering a major expenditure such as a new company vehicle - why would any business use valuable capital to buy a depreciating asset. Contract hire, which provides off balance sheet funding, improves a company’s gearing and can improve liquidity. In addition a VAT registered business can reclaim 50% of the VAT on the finance rental and 100% of the maintenance rental on a new car. In comparison no VAT is recoverable when a new car is purchased using cash, cheque or hire purchase.
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