Bassano Motors

Long time rental

Buy or rent a car? Old habits versus new perspectives. The winning formula is the one of long-term rental in that it is more economic, practical and intuitive. A solution allowing the individual user a common vehicle usage; freeing it up from all the ownership's bureaucratic and economic burdens.

Let's take a test: Nowadays, Buying a car involves the commitment of considerable amounts of capital with normally no discounts, benefits or interest rate subsidies. This means having to administer all costs related to the vehicle usage and management, such as for instance insurance, the maintenance or any unexpected rescue.

Buying a vehicle also involves getting rid of it and investing new money when the circumstances require changing it. All this implicates considerable costs that are both continuous and variables over time, as opposed to the lower and well-defined costs embraced by the long-term rental.

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This website' section is dedicated to explain the aspects related to the long-term rental taxation.

For each professional category the fee deductibility and the VAT deductibility are presented; these do not only vary depending on the professional category taken into account but also depends on the vehicle usage. The instrumental usage of the vehicle for instance, occurs when the commercial enterprise is subject to the vehicles and no business activity could be undertaken without them. The vehicle usage can also be non-instrumental or promiscuous.

Under the new legislation:

• (1) It is specified that for instrumental goods is meant, according to the restrictive Revenue's interpretation (circ.10.02.098 n.48/e) that all those goods without which the business can not be addressed and having a direct dependency with the revenues generation. The cars so considered are those ones used by rental enterprises, driving schools or funeral services. Vehicles used by company's commercial members of staff are not instrumental.
• in the event of a car purchase for a non-instrumental usage (not assigned to members of staff), anticipated depreciation is no longer possible and the vehicle must be depreciated according to the ordinary rate of 25% (you can not do 1st year - 25% 2nd year - 50%, 3rd year - 25% but only 25% for 4 years). This provision is applicable from the tax period in progress which came into force the 4th July 2006; the same applies to items purchased in previous tax periods.
• To deduct leasing fees payment(finance lease) the duration of the lease must not be less than 4 years (the previous legislation provided a minimum duration equals to 2 years). The new provision applies to the fees related to finance lease contracts agreed not earlier than the 12th August 2006 when the decree's conversion law came into force.

Download the deductibility chart for a comparison between long-term rental, lease and purchase.

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To better understand the economic benefits provided by the rental formula, guaranteeing full transparency and impartiality, a table comparing the costs between buying and renting in the long term is presented below. The table refers to the Opel Astra. 1.7 16v CDTI 101cv SW enjoy model and is based on data from Flotte & Auto Aziendali", the Quattroruote's extension of December 2005.

Download the table listing the economic benefits offered by the long-term rental.

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