Pies and car leasing

Pies and car leasing

Posted by

Martin Brown

October 2013

OK, I have to admit it. I was in celebratory mood last week.

We’d just been named Small Fleet Leasing Company of the Year by Business Car Manager (you can read about it in my previous blog) – and I was having a few drinks with some friends to celebrate.

I might also have mentioned to them that we had won two further categories in the awards as well…Well you would, wouldn’t you?

To be honest I usually avoid work subjects when I’m socialising because you always get dragged into ‘what’s the best car?’ and ‘how much is my car worth?’ type conversations, which to my mind are conversational cul de sacs.

But one of my mates who goes to football with me explained that he always preferred to buy his cars and would never consider leasing. He liked to own things.

Hmmmm. This was a challenge.

It’s a bit like getting pies at football I suggested (you’ll have to bear with me on this).

“When it comes to cars, buying versus leasing is a bit like getting pies at football.”

We both get the same pies at each home game. Except you’ve paid a subscription up front to buy all your pies for the season.

Me? I’m paying monthly, so I can still go on holiday and have a beer after the match because I’ve not just blown a hole in my bank balance trying to pay for all the pies at once.

What’s more, I can claim 50% of the VAT back on my pies so it makes them even cheaper (we’re pretending the ‘pasty tax’ stayed in place here).

At the end of the season, you get to keep the plate the pie came on – I don’t. That’s it.

We’ve both enjoyed the same pies but our approach to financing those pies has been very different and given me better cash flow and some tax advantages. Simple eh?

Well I thought so.

But I then had to translate my analogy – over another beer (well, it was his round…).

When you buy a car, I explained, you have a large capital outlay which can put a strain on your finances. When you lease, you pay a small deposit up front and then equal monthly instalments over a three or four year period. This smoothes out your cash flow.

At the end of the lease term you hand the car back with nothing further to pay, assuming it’s remained in good condition. And then lease a brand new car.

All the while you’ve been able to claim 50% of the VAT back (on a business car lease only).

Meanwhile, the person who’s bought the car can keep it – hence the plate bit in my pie story. But they miss out on the advantages of a brand new car when I’ve started to lease a new one (unless they go the sell and purchase cycle again).

So there you have it. Leasing sorted. It’s just like pies at football matches.

No wonder we won Small Fleet Leasing Company of the Year.


You also might like…

If you liked this article then check out our posts about similar topics

Sustainability is already the star of the Tokyo Olympics

The Olympics, that fabulous cauldron of national contests every four years, has had a bumpy ride up to its Official Open...

Decarbonisation, greenprints and green deals

It appears yesterday was the day marked ‘Decarbonisation Day’ Governments both here and the EU made far-reaching and...

We’re going for a deep clean on our journey to sustainability

We’ve made a start on sustainability But, hey, has it thrown up some difficult questions Questions that we did not env...

The benefits of switching your fleet to panel funding

Rather than rely on single-source funding for reducing fleet administration, there are significant benefits from choosin...

The 12 million vehicle EV pivot

Twelve million globally That will be the number of electric vehicles on the road in June 2021 Which sounds like a lot of...

Release the value in your fleet

Coronavirus: it may not exactly be on the run yet, but a rapid vaccine roll out has turned the UK around, from being a p...

The car as vacuum cleaner

Imagine this: you drive a zero emission car, so you’ve eradicated local pollution issues Good All positive Then ...

Shanghai Motor Show glows green

Tesla has a certain knack of creating headlines Fair play But on this occasion, the Elon Musk run electric car maker fou...

Ready to make the management of your fleet more efficient?

Request a call back


Or Call Us On: 0345 601 8407
Schedule a call back
  • This field is for validation purposes and should be left unchanged.