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Contract hire excess mileage

Discussion in 'The UK and Ireland' started by Peacher, Sep 29, 2015.

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  1. Peacher

    Peacher Member

    Joined:
    Sep 14, 2015
    Messages:
    18
    Location:
    Sutton coldfield
    I've started getting a few quotes in for finance, one of the contract hire deals I had in showed an excess mileage of 32ppm! Is that normal for tesla?

    my BMW's have usually been about 9ppm, and getting a new Tiguan in a few weeks that's 6ppm
     
  2. blobert07

    blobert07 Member

    Joined:
    Feb 17, 2015
    Messages:
    18
    Location:
    uk halifax
    It states 0.17 ppm on the website and it has been confirmed by a ate from Tesla finance.

    I've been quoted for a base S70 7.7 k deposit then £714 / myth over 72 months however with the returns at 37 myths it seems quite a good deal. ? As id probably return it after 3 years.

    That's based on 15 k miles per year and id pay £2550 extra if I do 20 k miles per year ?

    - - - Updated - - -

    ALPHERA Financial Services
    Quotation No. 8008698
    Mr Rob ALPHERA Financial Services
    Europa House
    Bartley Way
    Hook
    Hampshire
    RG27 9UF
    Date: 21/08/15
    TESLA MODEL S 60kWh 5dr [Nav] (2015 -
    2015)
    Reg No.
    Details Tesla Hire Purchase RVG 48-72 months Regulated
    Quotation
    Dear Mr
    We are pleased to give the following quotation for finance through ALPHERA Financial Services.
    The quotation will remain valid until 20th September 2015.
    (a) Cash price (inc. VAT) with government plug-in car grant already deducted
    (b) Less Initial Rentals / deposit
    (c) Balance of cash price/amount of credit
    (d) Add Charges
    (e) Purchase Fee (£1.00) payable with Final Rental (inc. VAT, if applicable)
    (f) Total Charge for Credit (d) + (e)
    (g) Balance Payable (c) + (f)
    (h) Total Amount Payable (b) + (g)
    £51,180.00
    £7,677.00
    £43,503.00
    £7,882.68
    £1.00
    £7,883.68
    £51,386.68
    £59,063.68
    Financial Details
    5.8 % APR
    Term of Hire
    The balance shown at (g) above is payable by:
    71 Monthly Rentals
    Followed by a final payment of £713.69 and the Purchase Fee of £1.00
    £713.69
    Total £714.69
    An indemnity may be required in certain circumstances.
    If, in providing this quotation, we have made any assumptions which are incorrect, please let us know and we
    will prepare a further quotation. This is not an offer by us capable of acceptance by you and, a proposal by you
    based on this quotation will be subject to acceptance by ALPHERA Financial Services.
    All Finance is subject to applicant status and is available for over 18's only.
    For your protection and to assist with staff training, telephone calls to ALPHERA Financial Services may be
    recorded.
    ALPHERA Financial Services are authorised and regulated by the Financial Conduct Authority.
    Yours sincerely
    Serena Weaver
    For and on behalf of ALPHERA Financial Services
    Use of your Information
    What we will do when you apply for finance:
    a) We will search your record at credit reference agencies. If you are an owner, director or partner in a small business, we may also check on your
    business. We will also check on any proposed guarantor of your obligations under the proposed agreement. So you must be sure you have your
    proposed guarantor's agreement to disclose their information.
    b) If you enter into an agreement with us, we will give details of this agreement, the payments you make under it and any default or failure to keep to
    its terms, and any change of name or address, to credit reference agencies. Account information given to these agencies remains on file for 6
    years after the account is closed, whether settled by you or upon default.
    c) We may check at fraud prevention agencies to prevent or detect fraud. If you give us false or inaccurate information or we suspect or identify
    fraud, we will record this and may also pass this information to our Group Companies, fraud prevention agencies and other organisations involved
    in fraud prevention.
    d) We will check our own records for information on you and obtain references about you from, and make enquiries about you to, other persons and
    organisations.
    e) We may pass your information to our Group Companies, agents and others for the administration of your application or providing a service you
    have requested related to the proposed agreement, to any guarantor of your obligations under the proposed agreement, to other third parties
    when required or permitted by law, such as in relation to any legal proceedings or to investigate or prevent crime, or where you give your
    permission, or in the process of us transferring the proposed agreement or our business to another organisation. If any of these organisations are
    in other countries in the European Economic Area, they will have similar standards of data protection as in the UK. If any of these organisations
    are outside of the European Economic Area, we will make sure they agree to apply the same level of protection of your information as we are
    required to apply in the UK.
    f) We will use a scoring or other automated decision-making system to assess your application and to verify your identity.
    g) We may contact you by post and occasionally by phone (and, if you give us your agreement, by email and other electronic means) with news on
    vehicles and other products and services which may be of interest to you and for market research purposes. We may also pass your information to
    our other Group Companies, authorised dealers and other selected providers of our products and services for these purposes. Our Group
    products currently include vehicles, vehicle finance, other vehicle related products and personal finance products. Our Group Companies trade
    under the BMW, MINI, Motorrad, Alphera and Alphabet brands. You can opt out of receiving this information at any time.
    What the credit reference agencies will do:
    a) Whether or not your application for finance proceeds, credit reference agencies will place on your credit file a record of our search. This record of
    that search (but not our name) will be seen by other organisations when you apply for credit in the future. A large number of applications within a
    short period of time could affect your ability to obtain credit.
    b) Whether or not your application for finance proceeds, the agencies will link your records and those of your financial associate(s), including any
    previous and subsequent names. A financial associate is a person with whom you have, or have had, joint personal financial arrangements such
    as joint accounts or have made joint credit applications. It may be a spouse or partner (not a business partner). These links will remain on your
    and their files until you or they successfully file for a disassociation at the credit reference agencies.
    c) The agencies may supply to us credit information such as previous applications and the conduct of accounts in your name and of your financial
    associate(s) and any business accounts you have, public information such as County Court Judgements and bankruptcies and Electoral Register
    information, and fraud prevention information.
    How we and others use the agency information:
    Some information held by the credit reference and fraud prevention agencies will be disclosed to us and other organisations to, for example:
    prevent fraud and money laundering by, for example, checking details on applications for credit and credit related or other facilities;
    checking details on proposals and claims for all types of insurance; checking details of job applications and employees;
    verify your identity if you or your financial associate(s) applies for other facilities including all types of insurance applications and claims;
    make decisions on credit, insurance and other facilities, about you, your financial associate(s), members of your household or your
    business;
    trace your whereabouts and recover debts that you owe;
    manage credit and credit related accounts and other facilities; and
    undertake statistical analysis and system testing.
    We and other organisations may access and use from other countries the information recorded by fraud prevention agencies.
    The information held by these agencies may also be used for other purposes for which you give your specific permission or, in very limited
    circumstances, when required by law or where permitted under the Data Protection Act 1998.
    If you want to receive details of the credit reference and/or fraud prevention agencies from whom we obtain and with whom we record information
    about you, please write to us at Alphera Customer Information Services at the above address. You have a legal right to these details. You have a right
    to know the information we hold about you if you apply to us in writing. A fee will be payable.
     
  3. chetalien

    chetalien Member

    Joined:
    Sep 3, 2015
    Messages:
    33
    Location:
    UK
    Thats about the same as I'm paying to buy via Hire purchase through my ltd company with a option to sell it back to tesla at 37th month for 50% purchase price.
     
  4. Peacher

    Peacher Member

    Joined:
    Sep 14, 2015
    Messages:
    18
    Location:
    Sutton coldfield
    Hire purchase is the option I want, I too have a ltd company and want the write down benefit. I've only had contract hire in so far, that was leaseplan go, which in general seem expensive to what I'm normally used to paying on my contract hires.

    Will hopefully get get remaining quotes in today / tomorrow. Am off to test drive again later this week and compare a few options.
     
  5. Novco007

    Novco007 Member

    Joined:
    Jan 26, 2014
    Messages:
    19
    Location:
    Oxfordshire, UK
    My business partner and I are thinking of getting a couple of 85D, and wondered if someone could explain the benefit of doing a hire purchase, rather than a straight lease? Trying to avoid getting the accountant involved, more £££ to spend on the options! [emoji6]
     
  6. chetalien

    chetalien Member

    Joined:
    Sep 3, 2015
    Messages:
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    Location:
    UK
    Basically lets assume after speccing up your 85d the total cost of the car is 70K.
    Now the whole amount can be written off as capital expense in year 1(if you have paid tax and your company has been running before then no worries. if its only been trading for 1-2yrs then may not be feasible)
    it doesn't matter whether you do it st purchase or hire purchase as long as there is cash flow its viable
     
  7. smac

    smac Active Member

    Joined:
    Aug 4, 2013
    Messages:
    1,121
    Location:
    Nottinghamshire
    But on disposal, you have to pay tax on whatever you sell it for ;)

    IOW It's more of a cashflow thing than anything else. On the flipside if you BCH the car then the payments come off your P+L so reduce your corp tax bill by that amount.

    It's also worth noting that there are early settlement clauses in the Alphera deal for those looking at doing a 72 month lease and handing the car back for the RVGP at month 37. You have one agreement with the finance company, and a separate one with Tesla on the RVGP price. AFAIK you cannot get an Alphera deal that is over the same 3 year period as the RVGP.

    Personally I'd look at getting a BCH if I were getting another one. (Current one bought for cash, but in hindsight given the constant changes to spec. I wish I'd Let the hire company take the risk!)
     
  8. Novco007

    Novco007 Member

    Joined:
    Jan 26, 2014
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    Location:
    Oxfordshire, UK
    Thanks for the info, anything to reduce the Corp tax..

    So, I thought that they were 100% write off in the first year? Assuming they still are, say I'm looking at £200k profit and I was going BCH for two £70k 70D, would that mean that my profit would now only be £60k?
     
  9. Peacher

    Peacher Member

    Joined:
    Sep 14, 2015
    Messages:
    18
    Location:
    Sutton coldfield
    I would always get my accountant involved in this kind of thing, if you've got a decent one they will give far more value than they cost. I work with mine on a monthly basis and he has a say over all but the smallest purchases I make. I pay mine on a monthly retainer so this kind of thing is coverd anyway.

    - - - Updated - - -

    thanks for pointing that out, I'd not got round to reading the small print yet, getting CH quote has been easy, struggling on getting BCP though.

    A few of the CH providers have said that to me too, I figured it was just their sales patter, but does make sense, EV's in 3 years time are going to have come on a lot!
     
  10. Novco007

    Novco007 Member

    Joined:
    Jan 26, 2014
    Messages:
    19
    Location:
    Oxfordshire, UK
    Looks like I need to give the accountant a call on Monday..
     
  11. smac

    smac Active Member

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    Messages:
    1,121
    Location:
    Nottinghamshire
    Best plan ;)

    My broad understanding (and I'm sure someone that does this for a living will pipe up!)

    Don't get too hung up on the first year allowances. Ultimately if the car is worth 50% after 3 years, you have to pay 50% of the tax savings back to HMRC on disposal.

    With a contract hire you can reclaim it as a straight P+L item, so all the hire payments come off the corp taxable amount, just over the years you incur the payments.

    Let's say it's 10k a year in contract hire payments over 3 years you reduce your profit by 30k. With a cash (finance lease) purchase it's 70k off your taxable profit in year one, nothing in year 2, but add 35k back on to your profit in year 3. Ultimately it's pretty close, and is more of a cash flow benefit, than an outright saving.

    With a BCH you have zero risk. With a cash (lease purchase) better cashflow, it's generally cheaper, but you bear all the risk of the car not hitting residuals. Personally I think there will be a facelift, or better batteries coming out in the next 3 years, and it could hurt residuals.
     
  12. Amanmahal

    Amanmahal Member

    Joined:
    Jun 8, 2015
    Messages:
    26
    Location:
    London, UK
    So in a word, yes, this is correct, you're taxable profit would be £60k. However, as mentioned previously, if you later sold these cars for, say, £25k apiece in the future, you would have to add on the gain of £50k (25k x 2) onto your taxable profit in that year.

    - - - Updated - - -

    Oops - sorry, didn't read that properly and see BCH mention.

    smac gives a much better explanation in the prior message, i missed that.
     

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