Buying Machinery - Lease or Hire Purchase Agreement

patjack

Hi All, just wondering if anyone on here as obtained machinery through lease or HP?

Just looking for typical rates in such agreements?

kk_man

Always hp here. Don't want a secondary lease or a tax bill. Bought tractor 2nd hand 4.9% over 5 yrs lately.

lakill Farm

patjack wrote: »

Hi All, just wondering if anyone on here as obtained machinery through lease or HP?

Just looking for typical rates in such agreements?

if VAT registered most go HP as vat can be reclaimed up front at the beginning

davidk1394

We're going leasing a tractor 2nd hand. We're registered for VAT. We have to pay a deposit up front. Then just under €10000 per year for the next 5 years starting in 2016. After that you can choose to buy the machine for 2 percent of its value then or keep leasing it for €150 a year or hand it back go again with a different tractor. The other bonus is that you can write the entire cost off against tax and it usually costs less than HP as we looked into both

Dunedin

davidk1394 wrote: »

We're going leasing a tractor 2nd hand. We're registered for VAT. We have to pay a deposit up front. Then just under €10000 per year for the next 5 years starting in 2016. After that you can choose to buy the machine for 2 percent of its value then or keep leasing it for €150 a year or hand it back go again with a different tractor. The other bonus is that you can write the entire cost off against tax and it usually costs less than HP as we looked into both

a bit of a novice when it comes to the finance side of things so bear with me if I'm asking stupid questions.

if you were to buy a new tractor for 65k with trade-in of 20k plus 10k cash input.

Where would you suggest is the best option for the balance of 35k (not VAT reg)

Farmer Pudsey

Dunedin wrote: »

a bit of a novice when it comes to the finance side of things so bear with me if I'm asking stupid questions.

if you were to buy a new tractor for 65k with trade-in of 20k plus 10k cash input.

Where would you suggest is the best option for the balance of 35k (not VAT reg)

Basically you shop around. If not VAT registered I do not think that I would go leasing I think I get a term loan. HP may be an option if maker is doinfg a low interest option however most of these are over 3 years max. Shop around banks andf credit unions. Disadvantage with credit unions they may require you keeping 20-25% of loan amount on deposit.

When inbusiness banks in general seems to be bertter to deal with

davidk1394

Dunedin wrote: »

a bit of a novice when it comes to the finance side of things so bear with me if I'm asking stupid questions.

if you were to buy a new tractor for 65k with trade-in of 20k plus 10k cash input.

Where would you suggest is the best option for the balance of 35k (not VAT reg)

Could you finance it through the dealership ? Most of them have a fairly good percentage rate over 5 years

Farmer Pudsey

davidk1394 wrote: »

Could you finance it through the dealership ? Most of them have a fairly good percentage rate over 5 years

These in general are HP agreements you are putting the machine up as security. If you miss a payment they can and will seize the machine