HP or personal car leasing - what's my best option?

AppleCore

I need to think about getting a new car. Mine costs £230 per year in tax and does 25 mpg so its not cost effective at all. Its also getting old and ropey and is needing work doing on it regularly which is expensive and very inconvenient.

I don't have any desire to actually own a car and don't really care what car I have as long as I don't have to worry about it breaking down and its economical. I was thinking about personal leasing as I don't have much of a deposit to put down and quite like the idea of just handing it back at the end of the term, not having to worry about selling it and it'll be under warranty the whole time. I could afford up to £200 p/m in payments but I've seen a Citroen C1 VTR on Nationwide for £115 p/m on a 2 or 3 year lease. It does 63mpg and the 10000 miles per year would be fine for me.

The other option is HP where I could trade in my old car hopefully for about £1500. I've been told that HP could in theory work in a similar way to personal leasing if you just handed it back at the end of the term, is this true? I know I could then use that car as a trade in but would I then be tied to that particular make of car? Would I be able to get a monthly payment as low as the leasing deal above?

I know very little about what would be the best option for me. Can anyone help me decide?

lawrie28

Lease. If you HP the value of the car could be less than you expect and you would be in negative equity. Also on your crdit file you would have a much larger figure as being lent to you.

You want a maintained lease - it covers maintenace etc. You just need Petrol and Insurance, and maybe a tyre or 2. Look after the car mind, dents and dings can be costly at the end, but you sound like that is what you need. It is worth shopping around as there is a lot of choice - if you try someone like Lombard, Lex, or other larger leasing company then they will have some special offers so you can get a nice car for less. A bigger company also means you are dealing directly, rather than through a broker who will take a cut!

chalkie99

AppleCore wrote: »

I've seen a Citroen C1 VTR on Nationwide for £115 p/m on a 2 or 3 year lease. It does 63mpg and the 10000 miles per year would be fine for me.

That figure is plus 20% VAT and is on a 4 year lease with £500 deposit so that is actually £138 per month plus £600 down so not as good as you think.

Also, take the mpg with a pinch of salt as claimed figures do not relate to real life conditions.