Work out your discounted cash flow and the value of money - and find out whether it's better to lease or buy your company car
Blog: RALPH MORTON
IT?S an old conundrum ? which is most financially advantageous?
While I know this is critical for the financial directors of SME firms, I often think it?s as much to do with the managing director?s attitude: do you prefer usership or ownership?
From the small business owners I?ve spoken to recently, the idea of just using a car for a period of time and money is really catching on. Partly it?s a cash flow thing ? keeping finances fluid and flexible.
However, one man who likes to crunch the figures ? seemingly for fun (escapes me, maths was never one of my favourite bedfellows!) ? is Colin Tourick.
Which is just as well. We need experts. And Colin is a company car tax expert and knows how to wring an excel spreadsheet to within an inch of its life.
Colin, who as well as an excel spreadsheet is a dab-hand on word, too, has just published a brand new book entitled Do The Maths.
The book takes you step by step through asset finance, covering discounted cash flow (DCF) analysis and demonstrating how you can create spreadsheets to calculate finance instalment and interest rates.
In other words, is it better for you to buy or lease?
As well as this, Do The Maths includes descriptions of the main ?Purchase-type? finance agreements (outright purchase, hire purchase, conditional sale and credit sale), business car leases (contract hire, ?open-book?, sale and lease back, finance lease) and other asset finance products (contract purchase, loans, bank overdrafts, ECO, schemes and salary sacrifice schemes).
email to a friend Category: Blog, Business Car Leasing, News
Source: http://www.businesscarmanager.co.uk/do-you-know-whether-you-should-lease-or-buy/
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