Does anybody lease their car?

BigBouncyBall

What are the downsides? I can't really see any other than the fact at the end of the 2/3 years you don't have an asset to sell.

I've found a car i really like for about £159 p/m for a 3+23 month deal. equalling a total of £4134 for the 2 years which must be equal to or better than the depreciation of a £17000 car over that same time? So it seems to work out well.

Am i missing something obvious here?

vikingaero

What car is it? Sounds like a mainstream car with high initial depreciation like a Ford or Vauxhall?

Money_Grabber13579

BigBouncyBall wrote: »

What are the downsides? I can't really see any other than the fact at the end of the 2/3 years you don't have an asset to sell.

I've found a car i really like for about £159 p/m for a 3+23 month deal. equalling a total of £4134 for the 2 years which must be equal to or better than the depreciation of a £17000 car over that same time? So it seems to work out well.

Am i missing something obvious here?

You'll pay a lot more interest that what you would've got in the bank. Therefore, you'll be out the difference in interest. What's the APR?

flyingscotno1

BigBouncyBall wrote: »

What are the downsides? I can't really see any other than the fact at the end of the 2/3 years you don't have an asset to sell.

I've found a car i really like for about £159 p/m for a 3+23 month deal. equalling a total of £4134 for the 2 years which must be equal to or better than the depreciation of a £17000 car over that same time? So it seems to work out well.

Am i missing something obvious here?

Sounds like an extremely good deal on a £17K car, most cars at £159 are Astras and Fiestas.

First of all check that is for personal users, some companies display (lower) business prices which are ex-VAT and adds on extra £25-ish quid in this case, in any case. Check milage limits and check that the lease company conforms to the trades standard for wear and tear and minor damage when the car is handed back.

For leasing in general- it depends what type of car and the price it is as to whether leasing is worth it in my view. It is a mixed bag for me. Things like Golfs often make bad lease purchases as they can be circa £330 per month, meaning you have an outlay of nearly £12k on a £16/17K Golf that has a 3 years and 60k on the clock and is still worth £7000 to £8000. Mini can be another one that isn't good value. Then again the aim of leasers is to make money!

Essentially the main aim with a lease is to look at car, see what its book price is after the leasing period and work out as you have if you'd lose more on depreciation.

Money_Grabber13579

flyingscotno1 wrote: »

Sounds like an extremely good deal on a £17K car, most cars at £159 are Astras and Fiestas.

First of all check that is for personal users, some companies display (lower) business prices which are ex-VAT and adds on extra £25-ish quid in this case, in any case. Check milage limits and check that the lease company conforms to the trades standard for wear and tear and minor damage when the car is handed back.

For leasing in general- it depends what type of car and the price it is as to whether leasing is worth it in my view. It is a mixed bag for me. Things like Golfs often make bad lease purchases as they can be circa £330 per month, meaning you have an outlay of nearly £12k on a £16/17K Golf that has a 3 years and 60k on the clock and is still worth £7000 to £8000. Mini can be another one that isn't good value. Then again the aim of leasers is to make money!

Essentially the main aim with a lease is to look at car, see what its book price is after the leasing period and work out as you have if you'd lose more on depreciation.

That is pretty much the list price of an Astra!:mad::mad::mad::p

JasonLVC

I'm a car lease fan.

There are two major downsides to car leasing and provided you accept them, then car leasing can usually work out miles cheaper than buying new.

1. You never own the car, you are just 'hiring' it and so you pay £4k over the two years but have nothing to show for it at the end of the day as it has to go back and you start again......however, if you factor in depreciation and bank loan interest you'll probably find that if you bought the car outright, after two years it would only be worth £xk anyway so you still 'lose' money whether you lease or buy. 'tis the nature of cars.

2. It's not your car so you have to look after it, like your life depends upon it. If you are partial to bumps, scrapes and smoking in your car then leasing is not for you as when you return the car, they'll want it in a very good condition.....there are set standards and they will accept stone chips and general wear and tear.....but scratched alloys, dents, dings, scrapes and fag burn/stains/smells on the seats will be charged to you (you can do all the repairs before returning as well if you prefer to save money, but it is still an additional cost on the overall deal).

That's about it. The best deals tend to be on caras that are either large/depreciate heavy like big Audi's/Mercs or or cars that aren't selling well (so no good deals on VW Golf's, Mini's, etc) but if you aren't too fussed about that you can get some great deals.

Hintza

Money_Grabber13579 wrote: »

What's the APR?

It's a lease so no APR involved.

OP just do a search on here for leasing and you will find plenty of tips.

SailorSam

My sisters oh works for one of the large car companies, they get a new car on lease every lear, it's quite common, buti don't think i'd do it. I'd like to see something that i owned at the end of the period.
I know that when the time comes for my sister to change the company is very particular and it's not uncommon that they ask for vehicles to have a respray if they think it's needed.
But then the price they pay covers everything, even insurance.

Hintza

Depends how you see a car as an asset or a liability personally I think they are just liabilities (in the broader sense of the word). I am looking for hassle and trouble free motoring. To figure it all out you need to just do your sums and make a few assumptions (normally future resale value) and then decide if it is for you.

If you normally keep cars for 6-10 years or drive bangers then leasing is not an option. If you drive new or nearly new cars with a warranty then leasing has to come into the equation.


On the OPs figures they would appear to have a great deal. Has VAT been included? Even if not it is still a good deal. Other thing to remember is VAT will be going up in January.

One thing OP what can you buy the car at in the real world? Is £17k the best deal to buy you can find or is that the RRP? If you can actually buy at say £13k-£14k then you will need to run the sums again.

sebdangerfield

Cracking advise from Hintza.

I lease one of my cars as the depreciation is so low it's far cheaper to lease than to buy. Another car I own is an Alfa 147 gta who's depreciation is catastrophic as its thirsty, high ved, heavy depreciation and unreliable (some say!) so it just comes down to what the residual values are for the car.

motorguy

Money_Grabber13579 wrote: »

You'll pay a lot more interest that what you would've got in the bank. Therefore, you'll be out the difference in interest. What's the APR?

Can you elaborate on that?