Car leasing - big deposit and small payments or vice versa

Hintza

OK I see where you are coming from.

My gut feeling would suggest to wait until the scrappage is over and hopefully prices will come down.

As for the acceptance fee that just annoys me when they do this...:mad:

MORPH3US

Hintza wrote: »

OK I see where you are coming from.

My gut feeling would suggest to wait until the scrappage is over and hopefully prices will come down.

As for the acceptance fee that just annoys me when they do this...:mad:

I know what you mean about the acceptance fee :mad:

Inactive

Did I dream it? or isn't there a damage / mileage clause for when you hand these " hire " cars back?.

Scuttsy

Hi,

What car is it you are interested in buying? The APR stated on your docs is 7.6% which in all fairness is pretty competitive. But even though you are buying on a PCP have you asked for a discount off of the OTR price at all?

MORPH3US

@ Inactive - damage fee is only if the car is damaged.... mileage fee is only if you go over specified mileage - AFAIUI.

@ Scuttsy - its a Smart ForTwo. I haven't negotiated on the OTR price, I have negotiated purely on the deposit and monthly cost as thats whats important to me - I cannot find many (and I mean only 1 or 2) cheaper brand new cars on PCP (for any manufacturer) out there.... only thing cheaper that I have seen is the Chevrolet Matiz and in comparison to a Mercedes Smart its like a 1p coin and a £50 note.

Scuttsy

If the OTR price goes down so does everything else. Have you checked dealdrivers or similar to see what they can offer?

MORPH3US

Agree about OTR price but due to the type of car it is it is doubtful that I will get a deal - Drive The Deal don't even list the new model (cancel that, found it), Deal Drivers don't list any at all and so I have submitted an enquiry.

MORPH3US

Just looked on Drive The Deal and found the car at £10,001.57

However the finance is as follows:

PCP Quote Calculator
Cost £10001.57
Deposit £1000
Length of Term 36 (months)
Annual Mileage 15,000 (miles)
Amount Financed £9,001.47
Total Amount Payable £11,940.76
Interest £1,739.19
APR 10.84%
Guaranteed Future Value £3,384.81
Payments Amount
First Payment £337.31
34 payments of £212.31
Option to buy (inc £75 fee) £3,384.81

So even though the car starts £189 cheaper, total cost (if I did decide to purchase) is about £140 more expensive...

Even if I don't keep the car it costs me an extra £100 per month....

What a rubbish deal that is!

AdrianHi

To go back to the original post the bigger deposit option clearly looks best.
Taking "I will hand it back in 3 years" as a guiding principle the question of whether a PCP might be better on not depends completely on what the car is.
If it is a Ford, Vauxhall, Renault or similar almost invariably the leasing companies get such big discounts buying these cars in volume that when you count the cost over 3 years leasing is the only sensible way to do it even if your dealer will offer you 0% finance / PCP and a 10-15% discount. None of that compensates for the big discounts the lease companies get and pass on the the form of lower lease payments.
You need to do the sums on the particular car to see if this scenario applies. Basically comparing depreciation, finance charges and tax disk costs (included in most lease deals) with the total of the lease payments and deposit.
With the PCP you take the risk of depreciation being higher than projected, when leasing the lease company takes that risk.
www.parkers.co.uk a bit optimistic but a reasonable guide to 3 year old prices.

The GFV they quote on PCP deals is usually very pessimistic to make sure the customer doesn't end up in negative equity unable to pay.

Zazen999

Don't forget; you have to hand the car back with minimal damage [fair wear and tear] and tyres to their standards [not yours], and the pence per mile additional mileage really adds up. So be prepared to add another £1000 on top to return it, if not more...depending on mileage.