WE ARE AT THE STAGE WHERE WE MUST BUY AN EXTRA VAN FOR OUR SMALL BUT EXPANDING BUSINESS.
BUT I DO NOT UNDERSTAND EXACTLY HOW TO DO THIS?
WHEN THE COMPANY PURCHASES ANOTHER VAN FOR IT'S EMPLOYEES IS THE VAN REGISTERED TO THE BUSINESS AND
TO THE BUSINESS ADDRESS OR IS THE VAN REGISTERED TO THE EMPLOYEE WHO WILL PRIMARILY USE IT?
( ANY FINES OR ROAD OFFENCES GO THE REGISTERED KEEPER BUT I'M GUESSING YOU DECLARE WHO WAS DRIVING AT THE TIME)
IN TERMS OF INSURANCE DOES THE EMPLOYEE PAY FOR THE INSURANCE ( BUT OBVIOUSLY REIMBURSED BY COMPANY)
OR DOES THE BUSINESS OWNER PUT THE INSURANCE IN THEIR NAME AND ADD THE EMPLOYEE AS A NAMED DRIVER?
(THE VAN WILL BE KEPT AT THE EMPLOYEES ADDRESS OVERNIGHT NOT AT THE BUSINESS PREMISES)
ALSO TRYING TO ESTABLISH THE MOST VIABLE WAY FORWARD FINANCIALLY FOR DOING THIS.
APPRECIATE ANY ADVICE.
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Replies
The van is the businesses asset and should be bought registered and insured by the business, the employee who uses it should be named on the policy unless you have an "any driver" type policy, this is where a good independant insurance broker is usefull to advise the most cost effective way to cover all the businesses assets including cover for this vans contents and other vehicles. Remember the employee is just that and has no legal or financial responsibilities in regard to your businesses assets, there are tax implications for the employee as he will be liable to pay tax on any mileage that is not classed as business use, if you have not got an accountant get one !
As to financing the van and there is no difference whether it is new or used, new is best due to warranty and you need to ask yourself if buying used can you afford a major catastrophic mechanical failure which will put the van off the road for sometime , will you have the funds to repair or replace ? Will you be able to service those customers that your employee is looking after? Or will you lose them with the obvious financial implications.
Anyway your finance options - use cash to buy outright, this is the cheapest option. Lease - you.pay a set amount each month for an agreed length of time with usually a down payment of equivalent to 3 months lease payments, you are just renting the vehicle and return it at the end of the term with the lease company charging you for any damage or excess mileage outside the agreed mileage. If the van is going to be knocked about forget it.
Hire purchase - we use this to finance our vehicles, you pay the vat as a deposit as a minimum or you can add cash as well. You have an agreed term up to 60 months and make monthly fixed payments until the end of the agreement at which point you own the van with nothing else to pay. We buy ours on a 60 month agreement, only put the vat down which as we are vat registered get back . We only keep the vans though for 36 months which is the warranty period and after this time there is some cash in the van over and above what is owing on HP and we use this cash as our deposit on a new van. This way we are always running vehicles under warranty.
The other finance option would be a bank loan but we find that HP is usually cheaper as the loan is secured on the vehicle whereas a loan is unsecured.
An accountant will advise which is the best finance option for your personal circumstances.
Hope that's all of some help, any questions post again
Thanks Peter for your message very useful.
Is the insurance affected up or down depending on the finance used? Unless you buy it outright or with a bank loan, you don't actually own it, so how does that sit with insurance?
We have bought 11 vehicles on a mix of HP and bank loans. The insurance provider has no interest in who has title to the vehicle apart from the declaration of the person/ business who is the registered keeper. The person / business who took out the finance to purchase has the legal obligation to discharge the loan /HP to whoever provided it. So if the vehicle is a total loss it is your responsibility to pay back the lender from the funds you receive from the insurers.
So to answer your question never been asked by insurers as to where the funds have come from to purchase and so no affect on premiums.
On a slightly different tack, buying on HP does increase your consumer rights as the HP provider has a legal obligation to accept the vehicle back if you are in dispute with the supplier over say a major fault that they cannot or will not rectify.
Also with HP you can write 100% of cost off against tax immediately after purchase even though you have not paid for the vehicle.
Thats great info, thanks
Are you a sole trader, partnership or limited company?
Hello
Limited company
The new van should be registered to the legal owner, in your case, the company.
You could consider a small fleet policy which may work out cheaper than having two seperate policies on the go and is less admin. Aviva have a small fleet policy but presumably others do similar.
You may be asked who teh main driver is but normally any employee of the company or any driver authorised to drive it by tehe compnay is permitted and gives you more flexibility (most likely with fleet policy)
We rxspsnded some years ago and it's turned out to be a disaster princably caused by uptrend regulation and weather
so be careful
good luck
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