Leasing A New Car

ristac

ristac

ristac

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Does anyone here lease their car? I understand that Business excludes VAT and personal includes the VAT when comparing prices.

It seems a bit of a minefield with some offering cheaper monthly payments but large upfront payment and others a less up front but more monthly, I just wondered what your positive or negative experience of it was and if you have any recommendations of who to consider or who not to touch with a barge pole.

Insurance as well, did your premiums go up as you were not the owner?
 
ristac said:
Does anyone here lease their car? I understand that Business excludes VAT and personal includes the VAT when comparing prices.

It seems a bit of a minefield with some offering cheaper monthly payments but large upfront payment and others a less up front but more monthly, I just wondered what your positive or negative experience of it was and if you have any recommendations of who to consider or who not to touch with a barge pole.

Insurance as well, did your premiums go up as you were not the owner?
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Lease deals are all about working how much the car will depreciate in the timid you have it, then adding a bit on top so they make their profit.

Have the car for longer ? Chances are it's going to depreciate less in its 3rd year than its first so longer can work better, however some cars may hold their value better so longer may cost you more.

Going to drive more miles ? This will usually affect values so they'll charge you more if you do more miles, however some lease days can end up cheaper to pay their penalty for going over the mileage limit than pay the extra up front

As for how much cash you put down, the more you put down the less you have to borrow so the less the monthly payments are

When considering all this in your maths, certain lease companies will get good deals on certain cars in low volumes as the manufacturer seeks to create some nice used stock for them to sell.

All of this has to be considered and compared. The only way to do this is look at the TCO - the total cost of ownership. This is your total expenditure over the lease period. Then make sure you compare deals over the same term so they are comparable.

Personal lease deals need you to have your maths head on so you don't get ripped off.
 
Don't compare monthly payments alone. Do:

(Total of all monthly payments + deposit + expected additional mileage charge) to get a total cost, and then devide by months to get a comparable monthly costs. That way you can get like for like comparisons on what outwardly may look like very differing deals.

Also remember that when you get out the end of a lease you might need a hefty deposit to get into your next one. I'm currently budgeting to have £3k in the bank once my current lease ends to cover the additional mileage charge I will have on this one and have about £1.5k available as a deposit on whatever I get next.
 
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I have 2 leased cars right now. I wouldn't do it unless you get a particularly special deal on the type of car you are looking for.

There is a great thread on pistonheads discussing this further.
 
Whether leasing work does depend on a number of things imho:

1. Will you ALWAYS be able to meet the payments, they aren't flexible in the same way as a PCP and returning the car early can result in as much as all the outstanding payments being made (Merc needed 90% of payments, Network want 50% when I return my 3-Series early).

2. Is the total cost of the lease (deposit + total monthlies) less than the total cost of a PCP agreement or depreciation if buying outright - my 3-Series would have cost about £2k more over 3 years even after paying for all the options up front.

3. In my experience you pay for all the options over the period of the lease, there is no residual value assumed for them so the options on my car cost circa £4.5k over 3 years.

4. Maintained leases can be really expensive, my 3-Series has had 1 £280 service in 2.5 years and 25k & won't need anything before it goes back so less than £10 p/m total cost - the quote for maintained was far higher each month.

5. Excess mileage charges can be eye watering, VW is 7.2p per mile but my current agreement is 25p per mile. If we didn't have another car to balance a significant increase in my annual mileage over it could have proved very expensive.
 
25p per mile? Wow, I wouldn't have touched that with a barge pole!

Doesn't it just make you paranoid and scared to actually drive the car your spending loads of money to own?

rebel rebel said:
Anyone know what sort of discount you can get if you pay 100% of the cost upfront?
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If you walking around with £8k+ in your pocket, leasing is not what you should be looking at.
 
Skeeter said:
If you walking around with £8k+ in your pocket, leasing is not what you should be looking at.
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I know what you mean, my thought process has been complicated.. I had planned on spending around 6k on a Merc C class around August time. Then someone mentioned I should take a look at leasing, and I found out I can get a M135i for around 8k for 2 years. I've not yet owned a car from this millennium and the temptation to just do this as a one off treat is massive.
 
A question from me that I've never seen a clear answer to:

When the lease is coming to an end, and you'd like to take out another lease, how do you ensure you don't:

a) have 2 cars for a period of time (paying 2 x payments)
b) have no car for a period of time (need to hire something temporarily for £££)
 
rebel rebel said:
Then someone mentioned I should take a look at leasing, and I found out I can get a M135i for around 8k for 2 years. I've not yet owned a car from this millennium and the temptation to just do this as a one off treat is massive.
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£4k pay seems like a lot to effectively borrow a 135i for a year.

Would bank loan interest, insurance, maintenance and depreciation cost you £8k over two years if you bought an Approved Used 135i with an extended warranty?

Sure, the lease is zero hassle and you get a brand new car, but it might be more expensive and chances are you can find a better specced car used.
 
blun said:
A question from me that I've never seen a clear answer to:

When the lease is coming to an end, and you'd like to take out another lease, how do you ensure you don't:

a) have 2 cars for a period of time (paying 2 x payments)
b) have no car for a period of time (need to hire something temporarily for £££)
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Luck, judgement, etc.

The easiest way to reduce it would be to take a new lease from the same place you had the old one from, as the dealer will line them up as best they can.
 
You know it's a good lease deal when the cost to lease over the term is less than the depreciation of the same vehicle on the used market.
 
Or if the lease deal is cheaper than any PCP deal, as the usual order of most to least expensive TCO is Lease > PCP > Financed Purchase (Loan) > Outright Purchase.

Edit: That Kia is a PCP, not a Lease.
 
Skeeter said:
Or if the lease deal is cheaper than any PCP deal, as the usual order of most to least expensive TCO is Lease > PCP > Financed Purchase (Loan) > Outright Purchase.

Edit: That Kia is a PCP, not a Lease.
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For the benefit of the OP, PCP is very similar to vehicle leasing in that what you pay is intended to purely to cover the cost of depreciation, and the financer will expect you to not buy the car at the end and instead choose to take out another deal on another car for 3 years.

Difference between PCP and Lease is that with a Lease the lease company owns and holds the V5. You are effectively only driving it because they let you. You'l have to tell your insurers you don't own the vehicle and you're not the registered keeper.

However with PCP you will be allowed to be the registered keeper even if you don't technically own the car as the finance company does.
 
A quick way to work out is to have a look at the same car/spec on Broadspeed, then work out the cost of your lease and what percentage of the value of the car you would be spending on lease costs. As an example I have a Merc A Class Sport, best price at Broadspeed is £21801, my lease costs over 2 years are £5496, so effectively 25% of the value of the car, so I was happy to go with that (plus the fact it was in stock and it was on a 1+23 payment profile). The Clio I have got is closer to 33%, which wasn't as good a deal but was right for me at the time.

One of the other circumstances for me was that the wife had to return her company car so we needed another car quickly, I also at the time knew I was going to be busting the mileage allowance of the Clio each year (10k) as I do around 16k miles. By getting another 10k mile allowance car I just hop between them each month and run the miles up on each of them. So for approx. £400 a month I have 2 new cars on the drive.

Another point to factor in to lease deals is cost to return the vehicle. I know I am going to get shafted on the Clio as the wife has been driving it for the last 6 months and every single wheel is kerbed, some to the point where the tyre wall has been ripped. I'm either going to have to pay for the wheels to be refurbed or pay the charge from the lease company when they see the shocking state of them........

Excess mileage is 4p per mile for the Clio and 6p for the Merc.
 
Fr0dders said:
For the benefit of the OP, PCP is very similar to vehicle leasing in that what you pay is intended to purely to cover the cost of depreciation, and the financer will expect you to not buy the car at the end and instead choose to take out another deal on another car for 3 years.

Difference between PCP and Lease is that with a Lease the lease company owns and holds the V5. You are effectively only driving it because they let you. You'l have to tell your insurers you don't own the vehicle and you're not the registered keeper.

However with PCP you will be allowed to be the registered keeper even if you don't technically own the car as the finance company does.
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Lease's also usually prevent you taking the car out of the country without prior written consent, and also other people driving the car on "Drive Other Cars" policies doesn't apply as your not the owner to be able to give them permission.

Theres also no equity in the car as an asset at the end, whereas with a PCP you may end up with a car worth more than the GFV and have a bit of cash to use as a deposit, etc.
 
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