Leasing a car
- Thread starter LiE
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Soldato
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- 24 Sep 2005
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When your employer gives you £400 a month to do so 
When your employer gives you £400 a month to do so
/thread
When you get an amazing deal on a car the manufacturer is unable to shift any other way. I've had my A6 2 years now:
List price: £26,000 (let's say I could have had it for £24k with haggling)
2 year lease cost 3+23: £5954 + VAT (of which 50% I reclaim) so £6474.98
Residual/buyout offer: £13,500 (what VFS will sell me the car for/what it's worth)
Thus the saving over having bought the car for cash 2 years ago is £4025.02 with no capital outlay.
So yes, leasing works if you're smart about it.
List price: £26,000 (let's say I could have had it for £24k with haggling)
2 year lease cost 3+23: £5954 + VAT (of which 50% I reclaim) so £6474.98
Residual/buyout offer: £13,500 (what VFS will sell me the car for/what it's worth)
Thus the saving over having bought the car for cash 2 years ago is £4025.02 with no capital outlay.
So yes, leasing works if you're smart about it.
When your employer gives you £400 a month to do so
But couldn't you just get a loan and buy a car with it? That's what I did.
I'm guessing that the A6 would have lost about £6.5k in 2 years in depreciation anyway? So you could just trade it in for a brand new car and you have saved your self from saving up a £24k lump sum . ( although depends on what your mileage is )
The A6 has lost £12,500 based on list price - that's the point. The lease payments were less than half the depreciation. If I'd bought the car for cash (even for £24k) I'd be over £4,000 worse off after 2 years.
It only works if you get the right car though.
I thought when you lease they factor in depreciation anyway and still make a profit. I suppose it saves you the hassle of having to sell.
I guess it depends if your company have an age limit on the car you get. I went onto the car allowance scheme in 2004 and bought a 1999 car with a loan, I fully intended to keep it looking nice and drive it for as long as this job lasted, in the end it got written off but whatever, it's replacement is going to be a 1993 car but it's in excellent condition so my boss is cool with it. He wouldn't leg me get an Impreza though as he says they are for drug dealers.
I guess it depends if your company have an age limit on the car you get. I went onto the car allowance scheme in 2004 and bought a 1999 car with a loan, I fully intended to keep it looking nice and drive it for as long as this job lasted, in the end it got written off but whatever, it's replacement is going to be a 1993 car but it's in excellent condition so my boss is cool with it. He wouldn't leg me get an Impreza though as he says they are for drug dealers.
Soldato
- Joined
- 4 Apr 2003
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Private leases are for small businesses / self employed who get tax benefits and require a business use vehicle or for those who have a car allowance from work. Or need a car / van for a short period only say 6 months. Short term can cost a lot more and some rental companies offer better long term corporate / commercial rental rates.
When you lease, your entire payment each month is depreciation since you don’t own the car. However it is all relative as in this instance you don’t want to own the car which is the full benefit of leasing.
Don’t necessarily confuse leasing with contract hire / PCP type schemes from a main dealer etc which although in essence are the same things are a product sold to everyone and not necessarily those who need for business use. Notably though, these lease schemes can be much better value than using contract hire companies.
However the point of leasing when you get a car allowance is that you match you car allowance with the lease fee. Since the car allowance is just that there is no depreciation to you but to your company.
In my instance I get my basic salary which my pension contributions, bonus, future bay increases are based on. Then I get the choice of a company car or car allowance on top which is set at a value above the Benefit In Kind rate of the cars available at the employees grade.
Now to buy a car with the car allowance isn’t such a great deal since a decent car on lease hire with servicing etc included would cost me much more than the value of my car allowance.
Example, a Saab 9-3 180 vector td is on my company car list. I could take and not get my car allowance but insurance, servicing etc is paid for. However to buy this car on a serviced lease would cost me ~ £200 more than my car allowance pm with a mileage restriction of 10-15k per year. Alternatively, I can go to a Saab dealer and pay 1-2k deposit and PCP for ~ £300pm. Still not better than taking it as a company car apart from the fact I have a higher salary on my pay slips due to the car allowance.
Now contractually, I have to have a car for business. Since I already have a car, fully paid for and owned by me, it makes sense for me to take the car allowance and use this as salary top up to run the car, pay petrol etc.
When you lease, your entire payment each month is depreciation since you don’t own the car. However it is all relative as in this instance you don’t want to own the car which is the full benefit of leasing.
Don’t necessarily confuse leasing with contract hire / PCP type schemes from a main dealer etc which although in essence are the same things are a product sold to everyone and not necessarily those who need for business use. Notably though, these lease schemes can be much better value than using contract hire companies.
However the point of leasing when you get a car allowance is that you match you car allowance with the lease fee. Since the car allowance is just that there is no depreciation to you but to your company.
In my instance I get my basic salary which my pension contributions, bonus, future bay increases are based on. Then I get the choice of a company car or car allowance on top which is set at a value above the Benefit In Kind rate of the cars available at the employees grade.
Now to buy a car with the car allowance isn’t such a great deal since a decent car on lease hire with servicing etc included would cost me much more than the value of my car allowance.
Example, a Saab 9-3 180 vector td is on my company car list. I could take and not get my car allowance but insurance, servicing etc is paid for. However to buy this car on a serviced lease would cost me ~ £200 more than my car allowance pm with a mileage restriction of 10-15k per year. Alternatively, I can go to a Saab dealer and pay 1-2k deposit and PCP for ~ £300pm. Still not better than taking it as a company car apart from the fact I have a higher salary on my pay slips due to the car allowance.
Now contractually, I have to have a car for business. Since I already have a car, fully paid for and owned by me, it makes sense for me to take the car allowance and use this as salary top up to run the car, pay petrol etc.
people need cars for jobs, reliability function and comfort is more important than "cool" to 99% of people.
Because if your going up and down motorways you want something quiet and comfortable with a warranty and courtesy cars. I wouldn't get anything Jap with other alternatives too.
I was quite happy using a Subaru Legacy for my motorway work but then I also find that the long trips are much more enjoyable if you have a car you can take onto the back roads for a good thrash through the twisties from time to time. A trip to Edinburgh is much improved by taking the A701 for example.
For courtesy cars I had a variety of cheap bangers which admittedly were much less pleasant for these sorts of runs, but I tried to arrange my servicing to happen on days when I wasn't doing onsite work.
Both the Legacy and the bangers were far more comfortable than the bloody Mk4 Golf the company had previously given me. It was a hand-me-down coming up towards the end of it's lease and had been specced with the "sports pack" which apparently means they replaced the shock absorbers with bits of lead pipe.
For courtesy cars I had a variety of cheap bangers which admittedly were much less pleasant for these sorts of runs, but I tried to arrange my servicing to happen on days when I wasn't doing onsite work.
Both the Legacy and the bangers were far more comfortable than the bloody Mk4 Golf the company had previously given me. It was a hand-me-down coming up towards the end of it's lease and had been specced with the "sports pack" which apparently means they replaced the shock absorbers with bits of lead pipe.
When your employer gives you £400 a month to do so
I don't quite get that much.
But what I do get from them each month, plus the added bonus of not needing to fork out for my own insurance, plus not having to pay for tyres and maintainance, all makes it worth while for me
Because Japanese cars are known for having lots of problems ...
Put it this way, my dad's Merc (was an 04 plate) had more problems that required it to be taken under warranty to the dealer in the 6 months he had it than the the Corolla he's had since, and my mum's Yaris combined (Yaris is 53 plate).
What Merc? And the MB dealer would have had courtesy cars to use, I'm not saying Jap cars are unreliable (you say combined, so it has been back), but if it goes you going to have to find your own way to work.
Was the new (at the time) A Class, and now it's the top of the range '04 Corolla (the TSport 2zz engine one).
Your dad leased an A class, then a top of the range Corolla, is he a moron?
He bought them.
Bought the A class, after having nothing but problems with car for 6 months he took it back to MB basically saying that it's spent more time at dealer getting fixed than him driving it ... so he actually got almost all his money back, so he went and bought the Corolla.
And by nothing but problems I mean this:
Computer thinking tyres are under inflated hence beeping, when they were fine. MBs solution was to "disable" that computer feature (yes disable, not fix the problem just disable).
2 fuel pump failures.
Electric window motors failing
Damage to cylinder wall (apparently caused by a faulty piston ring) [so it had a new block in]
Clogged fuel injector (I dont think MB ever heard of fuel filters)
A few other things I think, that I can't remember now
By contrast, the Toyotas have had NO issues, only ever been to dealer for regular service
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