Bargain Lease ? Or Better To Buy ?

Phil W

Phil W

Phil W

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I have started work for a car leasing brokers, they currently have on offer;

Brand new Renault Megane (Oasis) 1.5DCi with metallic paint and alloy wheels.

£149+vat per month.

Now this seems good value, however is leasing really the best way for people or is it better to buy private ?
 
I've never seen any leasing deals where it has worked out cheaper. Unless you can lease a car off your company (so that it pays for maintenance & insurance, etc.) it will never be worth while.

You may as well take out a loan.
 
That was my thinking, at least when you buy, you have something to sell, where as at the end of a lease, you have nothing to show for it, and no car ?

I suppose people that lease do it constantly ?
 
Phil W said:
That was my thinking, at least when you buy, you have something to sell, where as at the end of a lease, you have nothing to show for it, and no car ?

I suppose people that lease do it constantly ?
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From what I can gather, people who privately lease are people who didn't do Maths in school.

If you lease off the company you work for, and it's subsidised, then it can be worthwhile. I was paying £225/month last year for a brand new Mk5 Golf TDI. The £225 covered lease, insurance, MOT, servicing, tyres, all consumables (except washer fluid, and funnily enough, diesel). With a private lease, I don't think any of these are covered - insurance certainly won't be.
 
If you're not too fussy about what you drive, you can pick up some good deals on lease cars. Manufacturers will often release a model on a cheap lease just to shift them, rather than giving discounts that would have a bigger effect on residuals. Renualt seem to do it frequently - a neighbour of mine had a Megane CC 1.9DCi on an 12 month lease a while ago at about £190 a month. That deal was strictly 10,000 miles only with a ridiculous surcharge for additional miles - my guess is Renault wanted a supply of low miles 12 month old cars for the dealer network the following summer.

When a new model comes out, mfrs will also offer cheap leases to get cars out on the road - VW were offering 1.6 FSI new Passat's at about £200 a month for 18 months when they first came out.

If you keep your eyes open for special deals, and are flexible about what you will drive it can be a good way to frequently get a new car.
 
It would make a lot of financial sense for me to have a 'company car' on contract hire for tax/VAT reasons even though it's my company, the only obstacle is the 10,000 mile/year limit and, as blueboy2001 says, ridiculous surcharges if you exceed it :(.

10,000 miles really isn't a lot, I would imagine it's quite easy to exceed it.
 
Phil W said:
it depends what terms you have in the lease, typical charges are 5p a mile if you go over
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Really? That's substantially less than I was quoted! Is it ok to ask who you work for?
 
Adz said:
It would make a lot of financial sense for me to have a 'company car' on contract hire for tax/VAT reasons even though it's my company, the only obstacle is the 10,000 mile/year limit and, as blueboy2001 says, ridiculous surcharges if you exceed it :(.

10,000 miles really isn't a lot, I would imagine it's quite easy to exceed it.
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If you're running a Ltd company it's not always the best way because you'll be personally liable for company car tax. Even after getting the VAT back and writing off the payments for corporation tax it can still be cheaper to buy the car yourself and charge usage back to the company, which is what I do. Last year I charged about 22,000 miles to my company which gave me £7k tax free (first 10k @ 40p, 25p thereafter). That more than covers all my car expenses, and I own the car myself after 3yrs and can sell it.

Had I stuck it all through the company, I would have been paying about £160 a month in tax.
 
blueboy2001 said:
If you're running a Ltd company it's not always the best way because you'll be personally liable for company car tax. Even after getting the VAT back and writing off the payments for corporation tax it can still be cheaper to buy the car yourself and charge usage back to the company, which is what I do. Last year I charged about 22,000 miles to my company which gave me £7k tax free (first 10k @ 40p, 25p thereafter). That more than covers all my car expenses, and I own the car myself after 3yrs and can sell it.

Had I stuck it all through the company, I would have been paying about £160 a month in tax.
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Interesting... the accountant seemed to think leasing through the company would work out far cheaper in the long run but to be honest I hadn't taken the time to do the figures. Back to the drawing board I guess :).
 
NickXX said:
From what I can gather, people who privately lease are people who didn't do Maths in school.

If you lease off the company you work for, and it's subsidised, then it can be worthwhile. I was paying £225/month last year for a brand new Mk5 Golf TDI. The £225 covered lease, insurance, MOT, servicing, tyres, all consumables (except washer fluid, and funnily enough, diesel). With a private lease, I don't think any of these are covered - insurance certainly won't be.
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Me too, though my Golf costs me £56 a month for everything you mentioned above :eek: :D

That's for a 3 year lease though, with expected mileage at 75,000. The company picks up the tab for any excess though.

Fuel card costs me a further £63 a month for as much fuel as I want to put in it.

Next car is likely to be a 5 series (probably 520d SE) for £150 with a few toys included, in November.
 
NickXX said:
From what I can gather, people who privately lease are people who didn't do Maths in school.

If you lease off the company you work for, and it's subsidised, then it can be worthwhile. I was paying £225/month last year for a brand new Mk5 Golf TDI. The £225 covered lease, insurance, MOT, servicing, tyres, all consumables (except washer fluid, and funnily enough, diesel). With a private lease, I don't think any of these are covered - insurance certainly won't be.
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That actually depends..probably not relevant to the OP as he works for one, but .....

There are great deals out there, you just have to shop around to get the good ones.

It is true that you have nothing to sell at the end of a lease, but it can work out that the amount you pay in leasing over 3 years (or however) actually works out far less than the depreciation on a brand new car over the same period.

Road tax is usually included throughout the lease term, and also if you go for a lease period of the same time as the manufacturers warranty, then you'll be covered for exactly the same as you would be with a car you have purchased outright.

You've also got the option to bolt on maintenance deals and servicing when you set up the lease.

Leasing is taking off in massive proportions in this country, one of the reasons that dealers are finding it harder to sell new cars than they have for many a year.

There is every chance that leasing will save you money, certainly with depreciation the way it is, but as with everything, it's down to finding out what works better for you. :)
 
My step dad always leases his cars through his business, works out silly cheap in the end.

He has them for 24 months @30,000 miles, so 15k a year.

He's had various cars including an Impreza and now a 325. On the Im[reza it would have cost him more to buy it, run it, and sell it, than just to lease it for the two years.

Bargains can be had with personal leases, the aim being that you can "beat" the depreciation. If the cash you sink in over x years on a lease is less than how much the car woudl have lost in value in that time then you're quids in. Who cares that you don't own anything after the period, I'd rather own nothing and save 12k than own a car worth 10k. (figures purely fictional to get the idea across!).

*edit* That'll teach me not to read the post above!! *edit*
 
Ev0 said:
Bargains can be had with personal leases, the aim being that you can "beat" the depreciation. If the cash you sink in over x years on a lease is less than how much the car woudl have lost in value in that time then you're quids in.

*edit* That'll teach me not to read the post above!! *edit*
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That's what I was trying to say, put much more succinctly! :D
 
No challenge, sorry for the delay in reply, only realised today i hadn't told you who we are ;)

Give them a call, they do all they can to help ;)
 
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