Leasing

[BuckOff]

Hi everyone
Always owned the cars I've had and was wondering whats your thoughts on leasing.
I've had a quick look at the car I'm wanting but seems a bit of a minefield, a lot of companies out there and I'm wanting your experience of who you recommend and who to avoid.
Any help appreciated.

 

[VincentHanna]

I've "leased" my last two cars - Mercedes E200 and Polestar 2 (Contract hire, anyway)

I think it's the way forward at the moment. The only thing is that you can't do anything to them (tint windows, ceramic coatings etc) as they aren't your car.

 

[[TW]Fox]

Unless you get a particularly good deal - and they do exist, very much so but you need to be very flexible about the model and even make of car you go for if you want to benefit from one of the good deals - then leasing is pretty much the most expensive and least flexible way to run a car.

I struggle to see the benefits once you realise that 'lowest monthly cost' isn't necessarily a benefit.

Lots of the reasons people tend to come out with for why leasing is great are typically false - things such as:

'I don't need to worry about the car going wrong' - This is because it's new not becuase its leased
'It isnt my car so I don't need to care about it' - Hand back a trashed lease car and enjoy the bill you get at the end.

Like with most things there are specific situations whereby leasing is the most sensible options but generally IMO it is not.

 

[sovietspybob]

Yeah like Fox said the reasons people give for leasing are quite strange.

A woman in work swears by it now as her 15 year old car once left he stranded on her way home. So to her the only logical thing to do is to get a new car on lease every 2 years.. sure it'll probably avoid her being stranded but it's a massively expensive way of ensuring that where a decently maintained 12-24 month old used car every 5 years would probably fine at a fraction of overall the cost.

Unless there's some clever way, like you've got your own limited company and can fiddle the money somehow i just don't see how it's a good idea for the majority of people.

Also as has been highlighted in this last year they're very inflexible, lots and lots of people have been stuck paying a lot of money for a car that has barely moved in 12 months. Or worse if they've lost their job a lot of people then find out the paperwork they signed makes it quite hard to get out of without penalty.

 

[Kenai]

As with any other 'purchase' method, there are pros and cons to leasing.

The obvious pro is the predictable costs and low entry costs. It's a fixed payment on a new car, you know from Day 1 what your total cost of ownership should be. There's no potential for 'equity' like in a PCP, no potential for the car to be worth more or less than planned if you bought (this works both ways if your car holds value better than expected). It's also a very easy way to get into something for a low monthly cost that you'd otherwise struggle to afford as a cash purchase or an HP finance arrangement.

There are cons to be wary of though, that can catch people unaware. Ending the lease early is one such pitfall - if you sign up for 3 years, it can be very difficult to terminate mid way through if your circumstances change - often the leasing companies would want at least a significant part of the remaining payments to be made, if not all. So when you commit to spending £350 a month for 3 years, you need to be very comfortable that you'll still be willing and able to make those payments for the duration.

As for cost, they're not charities so consider that it's rare for them to 'beat depreciation' - people will often compare to list prices when drawing up cost comparisons and ignore that a cash / HP / PCP purchased vehicle can often be got at significantly lower than list. There are exceptions here and things like the Golf R flew off the shelves on lease a few years back because you could get into one for 2 years for about £5,000 but this is the exception rather than the rule. Generally, if something isn't being subsided/reduced by the manufacturer, leasing will be expensive overall.

 

[turbot1984]

Unless you get a particularly good deal

That's the key, get an outgoing model or buy last plate as new plate coming in when dealer is desperate to shift stock! Don't accept dealers initial 'balloon' payment or interest rate on PCP either, they ain't fixed when its a buyers market!.
*sorry to sound like Martin whatshisname off tv

 

[Kenai]

That's the key, get an outgoing model or buy last plate as new plate coming in when dealer is desperate to shift stock! Don't accept dealers initial 'balloon' payment or interest rate on PCP either, they ain't fixed when its a buyers market!.
*sorry to sound like Martin whatshisname off tv

You're talking about PCP, which isn't the same as Contract Hire / Leasing.

No balloon payments, no interest rates, the monthly cost is the monthly cost (generally speaking).

I also don't think many people actually lease directly from dealers.

 

[Deleted User 298457]

Be open on the car and not in rush, as others have said.

Golf R was on a stonker for £369 down / £369 a month a while back. Same as the M140i Shadow Edition, about the same numbers.

 

[[TW]Fox]

That's the key, get an outgoing model

Not necessarily - the cost of a lease is generally a product of the cars expected depreciation over the term. So whilst the outgoing models get sold at an often quite nice discount, at the other end they have the lowest residuals of any of that model as by the time the lease ends it's very much an old model and values reflect that.

It's very difficult to escape the fact that cars depreciate and somebody has to pay that. That somebody is almost always the end user - whether they buy it themselves and then trade it in, lease it or PCP it.

 

[Biz.Kid09]

I don't do it myself but my missus has a Mini on a 12mth lease, just over £200 a month. For her its the peace of mind for a brand new car, no worries about anything going wrong and its nice to have nice things even if its a little bit of a premium. She doesnt have the X thousands to throw down on a new car but £200 a month is nice and palatable.

It is coming up to end shortly and shes will be WFH for more than 3days a week so she wont renew it but been nice to have for 12mths.

 

[[TW]Fox]

£200 a month for a 12 month lease on a Mini is very cheap - either it falls into the bracket of those rare deals where it's well worth doing or you've forgotten to amortise the deposit.

 

[Rroff]

Brand new cars do go wrong pretty frequently though in reality - at least you might be covered by a warranty, etc. but that doesn't make much odds whether cash or financed.

Most reliable vehicles are probably well maintained ones in their 3rd to 5th year and/or 30-50K miles or so though not checked any actual stats for that.

 

[adam cool dude]

That's the key, get an outgoing model or buy last plate as new plate coming in when dealer is desperate to shift stock! Don't accept dealers initial 'balloon' payment or interest rate on PCP either, they ain't fixed when its a buyers market!.
*sorry to sound like Martin whatshisname off tv

Surely that applies to purchasing the car as well. My dad always used to change his cars every couple of years and buy from dealer just before the new plate came out.

 

[Housey]

All about the use case and the available deals really. You have to be willing to accept what they have if you want the best deals as most lease cars are not highly specced. The best deals tend manufacturer supported deals, such as the Polo GTI hyper car I managed to 'secure' some years ago. The biggest issues with that car was bloody car spotters and the paps, but the deal was good.

 

[Journey]

I've had a quick look at the car I'm wanting but seems a bit of a minefield

Quick look is not something you can do with a purchase/loan of a car.

To echo was has been said, getting a good deal is key, and by the sound of things you have something specific in mind already, which puts you at a disadvantage in terms of costs, that is if you care about the cost, some people don't.

I've PCH'd cars for over 9 years now, and the first one was a learning curve after that I did my homework properly and ended up with some really decent cars for way below PCP/finance costs. Spend lots of time getting to know the why and wherefores of the PCH market, things like GAP insurance, understanding terms like 1+23, 6+35 etc. making sure you compare mileage allowances with the excess cost to see what works out better, check out the cost of a fully maintained package vs paying for it yourself, find out which manufactures offer direct lease to avoid admin fees upfront which can be over £400, look at the BVRLA guidelines for charges to damage, investigate the early handback charges, and lots more

Basically there is lots to learn.

How about you tell us all what car you want, then maybe we can be even more helpful.

 

[[TW]Fox]

If you want 'a car' and you don't really mind too much what it is there can be some fantastic opportunities with leasing that could get you into something for a surprisingly low cost.

If you want a Mercedes A250 AMG Line in blue with the panoramic roof, the extra black pack and those nice wheels then it's unlikely there is a worse way to get it than leasing it.

 

[BuckOff]

Cheers for the replies, I'm doing about 650 miles to work over a 5 week period, so was looking at a new VW GTD. Maybe PCP, or even get an earlier model and purchase outright might be the better option, need to do a bit more research and have a good think.

 

[Kenai]

Cheers for the replies, I'm doing about 650 miles to work over a 5 week period, so was looking at a new VW GTD. Maybe PCP, or even get an earlier model and purchase outright might be the better option, need to do a bit more research and have a good think.

Maybe i'm reading this wrong but if you're only doing ~130 miles per week, which works out under 7k per year, i'd rather be getting a petrol car.

 

[turbot1984]

Cheers for the replies, I'm doing about 650 miles to work over a 5 week period, so was looking at a new VW GTD. Maybe PCP, or even get an earlier model and purchase outright might be the better option, need to do a bit more research and have a good think.

I got a mk 7 GTD on PCP from VW Wrexham. they were £100 pm cheaper than VW Chester! no idea why exact same spec 19" wheels etc. The randomness of car buying is astonishing.

 

[Mike9000]

I got a mk 7 GTD on PCP from VW Wrexham. they were £100 pm cheaper than VW Chester! no idea why exact same spec 19" wheels etc. The randomness of car buying is astonishing.

My friend bought his last three Golfs (GTD and 2x GTi) from Wrexham VW and they were more competitive than Chester VW each time.