How to beat the VAT increase on motoring costs.

It has been suggested that this month's VAT increase will have a major impact on the motorist and whilst we at CVC are unable to do anything about VAT on fuel, we can show you how to minimise the impact on running your company vehicles.

For those of you buying your company vehicles, a typical BMW 3 Series 320d Se Saloon would have increased by at least £600 due to the VAT increase. For those of you financing this vehicle via traditional hire purchase, this increase will represent a payment rise of approximately £21 per month assuming an interest rate of 5% per annum and a 36 month agreement. Total increase £756.

How can we minimise the impact?

Consider Contract Hire or Finance Lease!

As payments are based on the pre-vat price of the vehicle there is no change in the pre vat monthly payment. Vat is reclaimed as 100% on the maintenance element of an agreement (contract hire only) and 50% on the finance element. Thus a Contract Hire rental of £385.45 on the aforementioned BMW would mean an increase in the non-recoverable vat of £4.81 per month. Total increase £173.16.

Let us show you the best way to finance your vehicles.

It may surprise you to see calculations showing that paying cash is by far the least cost efficient way for businesses to finance their vehicles. Let us show you the true calculations and let you make the decision.

Calculations show the following:

Total cost of financing the above mentioned BMW after disposal;

Paying Cash £16,351.00

Hire Purchase £14,963.00

Contract Hire £10,900.00

Finance Lease £11,022.00

Talk to us for your own personal illustration.