Budster:
RC:

I try to get a low initial payment and low monthly rates but a huge residual value. 

Don't you still bear the residual risk, so lowering the initial payments is only reducing your cash flow burden - and increasing your carrying (interest) cost..?

Can you claim VAT on a passenger vehicle in Germany..?  If so, is it only if it's a lease?  (Otherwise the VAT issue would be irrelevant: you'd pay the VAT over to the dealer and claim it back in your next return - either all upfront if buying it cash, or with each payment on a monthly lease)

Keeping a low initial payment with low monthly payments actually increases the residual value of the car substantially. Since I do not intend to buy the car and since the lease is based on a mileage calculation and not a residual value calculation, I'm coming out of this pretty smoothly.  Smiley The issue is always to get the lease company lower the initial payment and the monthly rates and at the same time raising the residiual value. Of course they don't like to have a too high residual value because in the end, they bear the risk.

I can only claim VAT if I take the car on the company. However: Since leasing a car isn't actually owning a car, even if I lease the car privately, in the end, the VAT is still deductible and this is actually very important for the lease company, for example if they plan to sell the car outside Germany after the lease ends. If I decide during the private (!) lease to switch the lease to my business, I can do it without any problems and deduct the VAT in the process. I wouldn't be able to do this if I buy the car privately and then decide to put it on the company. It would be too late because once I buy the car privately, the VAT is "gone". Sorry, I can't explain it too well in English, maybe somebody with better language and financial English skills can. Smiley


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RC (Germany) - Rennteam Editor Porsche 997 Carrera GTS Cabriolet PDK, BMW X5M, BMW M3 Cab DKG, Mini Cooper S Countryman All4