We have tried to cover all the main points that investors ask about, but if we’ve missed anything and you would like to pick our brains about anything please get in contact.Contact Us
Your returns are generated by the hire of a car to an end user and the hire payments they make. Everyone leasing a car is fully vetted to ensure they can afford to make the payments on the three year lease. For extra peace of mind, Buy2LetCars will cover all monthly payments due to you up to at least 85% of the initial loan amount irrespective of the end user defaulting. In addition to this, the car you have funded is fitted with sophisticated Smart Telematics and Tracking Software which prevents any use of a car without due payment being made. Each month the driver needs to enter a code into the vehicle to continue using it and this code is only available to them once the full monthly payment has been received. Without the code the vehicle will be immobilised, prohibiting any further use.
Buy2LetCars commits to honour every monthly payment due to you at least up to 85% of the initial loan amount, irrespective of end user default. We also pay a pro rata percentage of the returns due on the investment.
Every customer is manually vetted (the old fashioned banking way) for proof of monthly salary, monthly outgoings, identity and proof of occupation. In addition, every vehicle is fitted with Smart Telematics and Tracking Software, meaning that if a monthly payment is missed, the vehicle is immobilised and, if the payment is still not made, the vehicle is tracked and recovered.
In the UK 90% of new vehicles are purchased on a finance package. Financial institutions and banks get involved in this market as it provides a secured, asset-backed return. You have the same opportunity to fund a lease vehicle through Buy2LetCars and see that vehicle deliver a return for you over three years.
Yes. We have sought professional advice and have been advised to treat any amount returned to a funder above the capital repayment as interest. Accordingly, Buy2LetCars Limited has an obligation to withhold 20% of the interest when paying a UK resident individual their final payment at the end of the term. The tax withheld is paid directly to HM Revenue & Customs.
Where the funder is a UK registered company there is no requirement to withhold tax on the payment of interest.
UK resident individual taxpayers should account for the 20% tax withheld on their self-assessment tax returns. The individual will have either a tax refund, no further tax or additional income tax of 20% or 25% depending on their marginal rate of income tax.
Please note this is a statutory tax instruction and should not be used as tax advice. In any event we recommend all funders seek independent tax advice. Any tax treatment depends on your individual circumstances and may be subject to change in future.
Buy2LetCars has a payment process in place which includes confirmation of payment, mileage monitor and insurance validation, at the time of each monthly payment.
The responsibility for damage to the vehicle relating to your investment is firmly with the end user, the driver. However, where this responsibility is compromised, your contract with Buy2LetCars ensures that you are not financially responsible for any damage. This is in exactly the same way that a bank or finance company is not held responsible for damage for vehicles driven by an end user.
If an end user fails to pay the vehicle hire payments and it is not possible to lease out that vehicle to another user, then Buy2LetCars will arrange for the sale of that vehicle. After the sale of the vehicle the amount returned to you will always be at least 85% of the amount you invested, as Buy2LetCars will pay you any shortfall up to this amount. However please note that this does not mean your investment is completely guaranteed up to 85%, as this amount depends on Buy2LetCars being able to make up any shortfall.
Service schedules are monitored through date of registration and the mileage monitor process. Every lease contract includes a Service Plan with the relevant Main Dealer, so is included in the monthly cost to the driver/end user. The end user is responsible for maintaining the vehicle and Buy2LetCars ensures the manufacturer’s schedule is adhered to. The end user is responsible for the second and third year road fund licence. Buy2LetCars monitors this as part of the lease agreement.
As with all vehicle lease agreements, the car will be repossessed from that customer. If necessary we will use the Smart Telematics and Tracking software fitted to the car to immobilise and recover your vehicle. We will use every effort to re-hire the vehicle to a new end-user as soon as posible to protect your monthly payments received. However, your monthly payments may be adjusted to reflect the new hire terms obtained. You will always receive at least 85% of your initial loan amount back provided Buy2LetCars is able to pay this amount to you.
Your capital may be at risk. The value of your investment may reduce in value and actual returns may be lower than expected. Past performance is not a reliable indicator of future returns. Please familiarise yourself with the risks involved by reading our FAQs above and Key Risks.
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