Car lease - does this seem reasonable.

corbyboy

At the end of August my current car insurance runs out. Due to having an unsettled claim and my wife writing off a car last year I am looking at paying £1300 to renew it for another year.

They have been plugging a car lease scheme at work (NHS) for the last few weeks and I have just got a quote from them. They will offer me a new VW Golf 1.6 diesel including servicing, insurance for up to 5 people and tax for £373 per month. Since this is a salary sacrifice scheme it will only end up costing me £270 per month.

It seems like a very good deal, especially as it includes insurance. It even includes wear and tear like tyres and windscreens, and breakdown cover.

You have to stay in the scheme for 3 years or else pay a penalty.

I was just wondering what people see as the drawbacks to this sort of scheme? Apart from the obvious one of not actually owning the car. Is there anything major that I am missing out?

maninthestreet

There will be terms and conditions attached, particularly for the insurance. Check to see if the insurance will cover both you and your wife, in the light of the write off and unsettled claim.

nomoneytoday

What happens if you leave your job?

corbyboy

I don't think it actually has any impact as you aren't assessed for a quote in that way. It is a fixed price, they didn't even ask for driving history, number of years licence held, previous convictions etc. I specifically asked the chap about people with high insurance premiums and he said it won't make a difference to the price.

The fact that my insurance was going to be so high this year is what attracted me to the scheme in the first place.

I will ask them about the unsettled claim though.

To nomoneytoday, if you leave in the first year you pay a penalty of 3 months premium, in the second year 2 months premium and in the third year 1 months premium.

Puttytat

Hi there,
We have a Fiesta on this scheme and apart from what you are already aware of, there are no catches whatsoever. The scheme was sold to us as part of the 'Improving Working Lives' which enabled people to drive nicer cars than they would be able to normally. It also benefits your employers due to the reduction in breakdowns etc which lead to lost work hours. What I have also noticed as a bonus, is that because the money is taken out at source from your wage, you don't actually miss the money that much either, so it's almost like having a free car!
One word of caution, our hospital site noticed an increase in the amount of car jackings due to the fact that most people now drive quite fancy motors and because the shifts worked by most of the staff (i.e. lates/nights/earlies) we are fairly vulnerable when either leaving or arriving at work.
Good luck to you and don't hold your breath waiting for it - the lead times are usually around 3 months!