Leasing a Car - Is it a no brainer

skyjumper

Hi guys, just started looking for a lease car and have found the following

you give 3 + 35 instalments of £200 (200x 38 = 7600) and keep the car for 3 years ( with 10k mileage cap each year)

and you do the insurance and the servicing bit and give the car back and walk away at the end of the 3rd year.

Assuming the car - brand new costs around 20k and you return with normal wear and tear, with not much damage, you don't have to take a cut in the depreciation of the car.

am I right in assuming the above or am I missing anything - the figures just an approximate. Can't understand why many people are not going this pathway if this was the case?

Any advice/ suggestins please welcome

daveyjp

With leasing you are basically paying for the depreciation.

As you note you don't own it at the end so you need to get another, there is a mileage restriction and you have to look after the car.

Some people like doing it, others prefer to actually own something at the end of paying for three years.

skyjumper

thanks daveyjp

As I understand it, the 20 k car would only cost around 8-9k( if u were to sell it) after the 3 year period. so keeping the car for 7600 and then giving it back would have protected from the falling depreciation.

I started the calculation after speaking to a friend who got himself a car (03 reg) at 8500 in Sept 2006. the car is now worth 2000 ( may be still holds the same value in Sept 09) so in 3 years he had lost around 6500, for owning a 3 year old car. Also factor in the MOT( which will not be there for a new car)
I'm talking about getting a similar kind of car for a little bit more, but without the MOT headaches- and as long as yu stick to the mileages, and hopefully not scratches and dents, you can walkway without the hassle of going through a private/trade sale.

Do I make sense ?

nobby24

Personally I would never do it, I like to know the thing I'm driving around in belongs to me and I don't feel as though I'm having to be extra careful because it isn't mine and somebody is going to carefully examine it when I've finished with it. That's my opinion anyway.

Rachel85

Yes, you have understood correctly. I have leased all 3 of the cars I've had and it has worked out an excellent option. The reason I like it is that you get a brand new car so doesn't need an MOT and most issues likely to be covered by waranty. If you shop around and aren't too picky about the car you want, you can find that not only is the amount you pay in repayments less than the amount the car depreciates by but works out cheaper than buying a 2 or 3 year old car, taking the depreciation and having to pay for MOTs and general maintenance issues that come with an older car. I think the reason for this is that when their is a surpless of car, or when they are about to facelift a vehicle for example, companies look to offer good leasing deals to shift stock.

There are a few things to look out for.

The most important is not to be too pick about the car you want. E.g. if you want a small family car then you will find something which is a good deal on contract hire. If you want a Ford Focus, you may well find that there aren't any deals around on this particular car at the moment. Also be prepared to go up a class of car for a good deal. For example when I was looking for my first car I wanted a small run around. Couldn't find anything suitable but a Citroen C4 (small family car) was an absolute bargain and I loved having it for the whole 2 years.

Secondly, if there are 'extras' that you really need to have, try to look for a car which already has them as adding them on later will cost you a lot. E.g. if the car you're looking at doesn't already have air con and you want it - you'll pay the entire cost of it on top of the advertised repayments.

Watch out for hidden costs (e.g. 6+35 repayment profiles or 6k/year mileage allowance).

Excess mileage charges can be VERY expensive so if you think you're going to do 12k/year, up the mileage allowance at the start rather than pay the extra later.

Check your Road Fund Licence is included. I failed to spot it wasn't in my last car.

When you return the car it will need to look like new. If you tend to scuff alloy wheels for example, you'd need to get these fixed or replaced and they'd expect no damage to the paint work at all. This doesn't bother me, as whether it was my car or not, I'd want the car I am drving around in to be pristine, but if you'd be content driving round in something with a massive scuff and wouldn't bother getting it fixed, remember the lease comapny wouldn't feel the same!

Finally not all insurance companies will ensure your least car as you'd not be the legal owner or registered keeper of the vehicle.

However, that said I think that leasing is a really good option if you get a good deal and if you do your homework.

Rachel85

skyjumper

rachael85 - that was a very useful post

could you suggest some links /websites who u have tried in the past
thanks again

jaydeeuk1

https://www.lingcars.com is supposed to be good.

Rachel85

skyjumper wrote: »

rachael85 - that was a very useful post

could you suggest some links /websites who u have tried in the past
thanks again

The best place to start is the Contract Hire and Leasing website (not sure if I can post a link, but Google will find it). Their home page lists a number of special offers, and its worth checking back regularly. Look at a number of different vehicles and see what prices come up. If something looks good value, although not what you're looking for, go onto the website of the company offering the deal as they may well have other good deals that are more suitable to your requirements/budget.

I have found Freedom Contracts (again, Google will find them) to be good value, although it was through them that Road Tax wasn't included, so do check.

Once you've got quotes, try going directly to the dealer and see if they can beat it. I found Citroen could, but Mercedes and Mini couldn't. Definitely worth a try though! Also try haggling, there's always a few pounds a month to be saved!

aqueoushumour01

leasing looks interesting but the fact that it needs to go back to them in the same condition you first drove it away is a bit worrying - anything can happen on the road. The other day I had my car keyed (the !!!!!!s!) so that's some scratches I'd presumably have to pay for if a leased vehicle. Certainly worth thinking about though!

zermattbusby

Thats a cracking deal ! £200.00 (inc vat) per month for a £20000.00 vehicle. Any chance of posting the link ?

Hintza

I think Rachels post just about covers it but a couple of additions:-

Excess mileage can be expensive but sometimes the quote for say 12k instead of the normal 10K miles will be much the same at the end of the contract (ie for example both work out at say 7p/mile extra) but certainly ask the question

Good point about Road Fund I have been having a fight about this on my current car. My comapny told me it was included but I never got it in writing so make sure you get it in writing.

Agreed go for the deal and not the car. A simple calculator to indicate whether you have a good or not is divide the monthy payments into the cheapest price you can buy the car for. If the number is close to or over 100 you have a great deal. Once it drops below about 70-75 then buying might be the cheaper option and more research will be required.

There are some comments on this thread about keeping it pristine. Remember if you own the car and come to sell it and it is not pristine all these dings will cost you money so you you would lose out anyway.

If you normally keep your vehicle fort a number of years say more than 5 or 6 buying will be a cheaper option in the long run.

Make sure you get it valleted at the end of the contract £60 will be the cheaper option. Than them charging you for it and first impressions always help.

So OP a £20k for £200/ month is a great deal (as has been suggested). VAT included?

I have noticed good deals are very thin on the ground this year and I do wonder if leasing will be an option for me next year.

For the best deals December is a good month to start a contract. Needless to say mine starts in February and I generally miss the best ones....:mad: