Leasing a Car - Is it a no brainer

BikerEd

Write off the car and you may have a signficant gap between what the insurance pays and what the lease company want to terminate the lease. A colleague of mine's car was stolen and then recovered in a terrible state. The insurance company paid to have it repaired but the lease company hit him with a heavy penalty because the car was worth less in their opinion.

fergies_army

A 20k car loan would cost aroun £600 ish a month over 3 years (prosuming no deposit)

skyjumper

fregies_army,

we were talking about leasing car, not buying it on a loan, no offence pls

AdrianHi

There are times and cars where leasing is genuinly the better option due to the discounts the leasing company gets and then passes on to their customers. It can even be better than "owning" and older car especially if you add in the cost of extended warranties or get unlucky with out of warranty repair bills.

A downside of leasing not mentioned so far is that you are committed to paying for the whole term, which can be a problem if you loose your job.

In the end you never "own" a car permanently, you buy it and either sell it or scrap it in the end and it costs you money while you use it (depreciation + other running costs). If leasing proves more cost effective and you can deal with returning the car in the right condition, I don't see a problem with it.

My trouble is I'm fussy about what car I want and I never want what is cheap to lease.

fergies_army

skyjumper wrote: »

fregies_army,

we were talking about leasing car, not buying it on a loan, no offence pls

I was suggesting how much it would cost you to purchase the vehicle via a car loan to provide a comparison to the leasing cost. You asked if it was a good idea/deal to lease, therfore providing an alternative shows how much difference in cost per month you gain by leasing not buying.

AdrianHi

fergies_army wrote: »

I was suggesting how much it would cost you to purchase the vehicle via a car loan to provide a comparison to the leasing cost. You asked if it was a good idea/deal to lease, therfore providing an alternative shows how much difference in cost per month you gain by leasing not buying.

A PCP illustration would be a better comparison rather than a straight loan as this method effectively pays for depreciation and so has a lower monthly payment - it's closer to leasing.
They work by deposit, lower monthly payment, end of term balloon payment or hand the car back. You accept the risk of the residual value being lower than expected (unless you guarantee it which costs so much it's usually not worth it). The advantage is you can "own" the car (if that's important to you) and you can terminate the agreement mid-way onwards if it looks like your going to loose out due to faster than planned depreciation occurring.
PCP is not usually cheaper than a lease (depends on the car) but suits those who want the option of owning the car or wanting a bit more flexibility to get out of the deal before then end. The total outlay is usually higher than a regular loan if you plan to keep the car. It's actually a very popular way to buy a car, especially with more expensive cars like Mercedes, BMW, Audi etc.

Hintza

So OP as usual it's horses for courses. You just need to weigh up all the pros and cons and decide if it's for you.

For many the excess mileage is normally the deal breaker.

plane_boy2000

I am on my second lease car.
Regarding condition upon return there are guidelines as to what is acceptable damage etc. Its not quite as bad as having to be as it was when they delivered it to you - most companies have a guide of whats fair wear and tear versus damage. My last car (Audi a3) went back at 2 years old - it had a couple of small scratches and a scuff on one alloy, but the guy collecting it told me I was unlikly to hear anything as the car was being taken straight to the auction house. Sure enough I had a letter a couple of weeks later to tell me all was OK.
My current car was supplied by Ling - on the whole I would recomend her, but there are a few issues I have. Firstly I was keen to not MOT the car at 3 years old - was told that it would be OK to not MOT if the car was returnd just prior to its third birthday. Having checked my contract it states that I must have it MOT'd if the MOT is due within 2 months of return, so no way around that one. Also Ling bangs on about having your car serviced at any VAT registered garage, but my contract states it has to be at the franchised dealer.
Small issues, and still fairly happy as there is no way I could have got the car I have for what I am paying.

As above flexibility is key - dont set your mind on a specifc car as you will get some great offers on cars you hadnt considered, but you also need to move quickly - if you see a good deal you need to take it there and then as they are often only for a limited number of stock models.

kazcoates

I have just finished a 3year lease and would reccommend it to anyone. I have just taken ordered a new car for September. Last time I went to my local dealer but this time I shopped around on line. I was shocked at the savings! My new car is costing me £499 a month inc VAT. My dealer wanted £650 for the same car! I had 3 quotes on 3 different cars and they all worked out a lot more expensive if I went to a main delaer.
I did ring lots of on line companies.

Avoid Gateway2lease at all costs, they badly let me down. They quoted £481 originally and then a week later wanted to charge me £550. I rang them everyday as I was conscious that all the other leasing companies had increased their prices on the model of the car I wanted. I even spoke to the director who assured me that the price wouldn't increase. It took them ages to sort out the finance (most companies can do it within a day or two). Other companies also told me that Gateway gave incorrect prices when I rang other companies asking them to match Gateways quote. They all proved to be right. I established from Gateway that the price of my car had increased on the 19th June. I called them on the 24th to order my car and they confirmed that the price was still as the origional quote. They wasted my time and now won't have my car for the 1st of September!