Depending on the type of business you are starting, vehicles could be one of your most expensive purchases. Surely you will also need a vehicle, no question about it. Nevertheless, I would like to ask you again: do you absolutely and compellingly need a certain vehicle or doesn’t your private car also do it for the time being??
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If you do not currently have a need for a vehicle, or if you have a need for a vehicle, you can. If you are already using one, you can skip this article and move on to the next one.
You have already dealt with this topic in the chapter on vehicle cost estimates. You have already determined whether it should be a new or used car and also whether you will buy, lease or otherwise organize it.
Please refer to your cost estimates again now. Consider also, on the basis of your list of requirements, whether the vehicle or. In the execution is still necessary and clarify now the last points with your distributor. If the offers are no longer up to date, you may have to look for a new car. Look for another vehicle.
Number of offers
I recommend you to shortlist not more than 3 offers. Otherwise it becomes too confusing and you have to invest too much time. Also check the details, such as mileage, number of previous owners, prior damage, warranty coverage, etc.
car leasing for small businesses
Vehicle leasing is particularly interesting for entrepreneurs and start-ups. Although it is currently advertised very strongly for private individuals, who are mainly attracted by the low monthly rates, it is rarely worth it here. Because tax advantages, as is the case even for small businesses, do not exist at all for private individuals.
Due to a lack of knowledge about car leasing, however, there are still many unanswered questions that should be clarified here. As a rule of thumb, however, companies that need a vehicle should seriously consider leasing it.
Vehicle leasing and tax
The first step in vehicle leasing is to select the right vehicle. In most cases, a new vehicle is chosen; leasing a used vehicle is fraught with additional problems. A down payment in the agreed amount is made for the vehicle, which is deductible as a business expense. The monthly leasing installments are also recognized as tax-deductible operating expenses.
However, small business owners should make sure that the business use of the leased vehicle is at least 50%. Otherwise, the vehicle can be attributed to private assets; the tax advantages are then cancelled out again. In addition, if the vehicle is not used exclusively for business purposes, a logbook must be kept or the 1% rule must be applied. This increases the company’s profit by one percentage point of the gross list price, which the small business owner must pay tax on. However, it is usually more favorable to keep a logbook, even though this involves more effort.
Input tax deduction in the case of low business use of the private car?
A car that is used by a businessman for less than 10% of his business does not count as business assets. The input tax from the purchase of the car can therefore not be claimed. The situation is different when it comes to ongoing vehicle costs. The nuremberg fiscal court, in its ruling of 7.08.2007 az. II 250/2005 decided that the input tax, in the proportion of the professional use, can be claimed from the current vehicle costs.
Vehicle leasing and the associated agreements
Another point with car leasing: the car does not become the property of the small business owner. The leasing rates are therefore rather to be seen as a usage fee. For this reason, various agreements are made in the leasing contract. For example, an agreed mileage may not be exceeded at the end of the term or the vehicle must have a certain residual value. If the agreed value is not adhered to, the lessee must pay for it in arrears. The better variant is usually the agreement of a certain mileage during the term, as this can be influenced. It is difficult to agree on the development of the value of the vehicle lease, as this cannot be influenced. In addition, the small business owner usually incurs costs for fully comprehensive insurance, with which the lessor wants to cover himself.
Really so cheap? Why leasing is not worthwhile
The marketing departments of the leasing companies have managed over time to anchor the opinion that leasing is a favorable form of financing in people’s minds. We examine this prejudice a little closer: is leasing really an alternative, and if so, for whom?? Get ready for a surprise!
A severe example
I have a mobile leasing agreement for a leased item that can also be purchased for 4.500 euro could buy. However, the leasing contract runs for four years with monthly payments in advance and a monthly rate i.H.V. 130 euro. In addition, there is a closing fee due with the first installment i.H.V. 50 euro, and at the end a residual value of 500 euro to be paid with the last leasing installment – which the lessee did not know at the beginning of the contract (!) is known. If you calculate this contract with a leasing calculator like this one, you will get an internal interest rate (d.H., effective interest rate) of not less than 20,58% (with only one interest date it is even higher). In any case, I have a different idea of what a favorable financing deal is!
According to the Price Indication Ordinance, the effective interest rate must be indicated for loans, but not so for leasing contracts, which are not considered loans under the Price Indication Ordinance. The lessee is therefore left in the dark about the amount of the interest, especially since the residual value is almost always concealed beforehand – the leasing rates therefore look really favorable, but they are not really so. The leased item can still be used under certain rather complicated conditions as a "finance lease" be attributable to the lessee in balance sheet terms (u.A. §39 abs. 2 nr. 1 AO "real estate leasing remission BMF, letter v. 21.3.1972, F/IV B 2 – S 2170 – 11/72, bstbl I S. 188, and "mobile-leasing,remission", BMF, letter v. 19.04.1971, IV B/2 – S 2170 – 31/71, bstbl I 1971, 264, as well as ggfs. IAS 17), but the latter still has no unlimited power of disposal over the leased property before the expiry of the lease and the transfer of ownership under civil law. So changes or modifications to the leased item are regularly prohibited. In addition, in the case of vehicle leasing, there is the requirement for fully comprehensive insurance, which is often very expensive: the lessee therefore effectively pays twice for the leased item. And finally: leasing companies also sell their customers’ data. one may not be surprised therefore, if the conclusion of a leasing contract increases the flood of advertising garbage in mailboxes, faxes like email-boxes still further.
So when leasing is worthwhile
This brings us to a sobering conclusion: leasing pays off – but only for the lessor. also its argument, that the leasing rates are deductible as business expenses for income tax purposes, is very often simply wrong, namely, if the object is to be accounted for at the lessee – which hardly any leasing company tells its customers. In addition, even if the leasing payments are actually deductible, taxes are avoided, but (under the conditions of corporate income tax, i.e. z.B. In the case of a gmbh) four times the (!) the tax savings must be paid in leasing installments. Is this really a tax saving?
What the leasing company representative is not telling you
leasing is, according to the simple truth, by far the most expensive form of credit. This is only worthwhile if you can’t get any more money elsewhere, but absolutely need the leasing thing – but if you are in this situation, you should rather think about completely different forms of financing like venture capital or mezzanine financing, or maybe even insolvency. But no representative of the leasing industry will tell you that. It is therefore not surprising that leasing companies are now advertising using rather dubious methods – such as the "car king" for a company called AI-leasing. We have just one simple piece of advice for our readers: finger off!
Use my calculator!
The leasing calculator enables you to plan in advance the financial burden of the leasing object. So the leasing business remains under your control.
You shouldn’t miss out on this: the test drive
If you’re buying a used car, be sure to test drive it first.If the dealer refuses or gives you excuses, it is better to leave the vehicle alone. If possible, try to choose a longer route and also drive a bit on the highway, because some deficiencies only become apparent at higher speeds.
Confidence check for used cars
At this point, too, I recommend the support of experts. At the TuV and ADAC, you can get a comprehensive inspection of your used car for comparatively little money. depending on what and where you have the car checked, you can get the "trust check" for as little as 19.90 euros.
Label and design your vehicle
You may also want to label your vehicle. Please remember to do this relatively soon after your purchase. Some car dealers offer this at the time of purchase. you can read more about this topic here: vehicle advertising and design.
What can i do now?
Even if you have other tasks to take care of at the same time, please take enough time to select your vehicle. Since a car has a relatively high purchase cost, please think carefully about which vehicle you choose.