Car leasing - newbie

Milky_Mocha

Hi I'm looking to lease a car for the first time. I want a good site to start my search. Is there a particular one that is famed for being good value? If anyone knows of a website that teaches the ins and outs of leasing I'd be grateful for a link. Something that explains types of leases, dos and don'ts, things to look out for, etc.

Thanks

bluesnake

Hi, I am not an expert, but believe if you have a company, leasing once offered some tax benefits.

My ex-colleague (an employee) leased his car, and was a financial millstone around his neck. He spent many 1000's over a good few years, kept saying how good and what a smart and cost effective scheme it was, plus the upgrades, but had nothing to show bar a hole in his bank statement once his contract was not renewed. He ended up buying a second hand car from CarGiant that cost him far less than a years payments.

marlot

Start with Ling's cars! She has a 'how it works' tab

http://www.lingscars.com/

blacksta

I can categorically state that the only party that benefits from lease deal is the Dealer. Lease out for the 2 years thus collecting mad fees and sell at a premium 2 years later whilst buyer is out of pocket, nothing to show for it or rolled on to another MUG contract.

If i were you i would save up the monthly premium for two years and the buy the car outright when it is 2 years old ( let another MUG pay the 2 years of depreciation fees)

k3lvc

blacksta wrote: »

I can categorically state that the only party that benefits from lease deal is the Dealer. Lease out for the 2 years thus collecting mad fees and sell at a premium 2 years later whilst buyer is out of pocket, nothing to show for it or rolled on to another MUG contract.

If i were you i would save up the monthly premium for two years and the buy the car outright when it is 2 years old ( let another MUG pay the 2 years of depreciation fees)

You sound very bitter about this however I'll prove you 'categorically' wrong.

I've just finished a 3 year lease on a very nice car. No discounts available on a new one 3 years ago so I took the lease option. Car was £35k and I paid £1,197 then 35 x £399 per month (inc VAT and servicing/tax etc) total £15,162 (plus a few bits for acceptance etc so lets say £15,500)

Before returning I paid c£500 to have wheels refurbed and a couple of small dents removed so my total outlay was £16k.

Car was subsequently sold at auction at 3yrs/50k miles for £10,600.

Cost to me to drive the (mid life crisis) car of my dreams was £16k (funded from car allowance from employer)

Cost to the manufacturer (or his UK subsidiary/finance company) was £8,400 (£35k - £16k - £10.6k) PLUS over £3k of VED/servicing/tyres/warranty work

I may be proved wrong but suspect the deal worked better for me than the manufacturer

blacksta

^^^

If you dont mind - can you share the name of the car and model of the car you leased ( it will help my next post) . As this site's aim is to save people money. honestly, 16k is a lot money to throw away over 3 years - no offence.

albionrovers

I'm on my 3rd lease car. It ain't for everyone but it sure is nice to get a shiny new car every couple of years which is always under manufacturer's warranty and never needs an MOT. Pay-as-you-earn motoring, not Moneysaving I agree but if you budget properly you can get a good choice for the £200/month mark. Stick to budget though because, as with anything, the sky's the limit.

k3lvc

blacksta wrote: »

^^^

If you dont mind - can you share the name of the car and model of the car you leased ( it will help my next post) . As this site's aim is to save people money. honestly, 16k is a lot money to throw away over 3 years - no offence.

Of course but it's of no relevance (Alfa Romeo Spider 2.4JTDm) - I wanted that car and that way of funding it saved me money vs any other alternative. And your suggestion of buying a 2 year old Alfa and expecting it to provide me with 3 years/50k miles of reliability is slightly laughable.

As for the 'offence' there's none taken - it was funded entirely from my car allowance (post tax)

xoleeb

I agree with the "fors" - I have just taken out a 3 year lease on a new focus - book price £18,810 including all the extras. I have paid £719 upfront and have 35 monthly payments of £239.99 so a total after three years of £9118. If I was to have bought the car I would have had to take it on finance - so something along the line of £2500 deposit and so over 36 months would have been around £480 per month - I would have lost well over the £9k I will have paid leasing the car in depreciation and I have kept my monthly payments and deposit to an affordable level. So I believe in my circumstances leasing is good for me - A brand new car - no road tax to fund - under warranty for the length of the lease and affordable...

albionrovers

Oh, and I've never paid a penny handing either car back (BMW/Audi) and got them both serviced at independents not dealer. Please don't take this as an invite to cut corners though, always refer to T&Cs. Think both went straight to auction so I got lucky in that respect. Both were immac. though.

bigjl

I think it is very nice for these nice Lease Companies to give people free cars.

The only person that benefits from a Lease Deal is the Compnay that does the Leasing.

It is a good busness model as they never buy them for retail anyway and are only interested in disposing of the car at the end of the deal as they have offset all sorts against tax that they can't make any money from the car at the end.

Addison Lee own their own Leasing Co, after three years the cars are "sold" to the other (Car Sales) company that then sells them on. This company has a regular supply of cheap stock, taxman is happy with the lease company, and Addison Lee Private hire then rents the leased vehicles to the drivers.

There will be those that can explain the way this works better than I do but above is why I reckopn the only real winner is the Lease Co.


Obviously if you want to spend money to have nothing to show for it after three years then it is your choice, I can't see the point.

Unless, like K3LVC, you have a car allowance to spend, then it is a win for you aswell as the lease co.

However his situation is not typical and unless you can offset the lease against tax in some way then there is very little advantage in leasing on a personal basis in my opinion.

Feel free to disagree, but all I think you are doing in a lease is financing the depreciation for the lease co if you ask me.

They can be nice if you like to change cars every three years, but you will never own it, so they aren't very MSE, nice, but not really good value, it is a bit like renting a house instead of having a mortgage. Both have advantages, but after the term of the mortgage the house is yours, after the same period of time the rented house still belongs to the landlord.