Leasing Cars: Good idea or Bad idea?

Haggis_2

Does anyone have any advice on whether leasing cars is generally a good or bad idea? I'm not totally sure how to do the maths to prove it either way.

Specifically, my brother-in-law is looking at leasing a BMW 118d Sport 5 door from a BMW garage. He has been offered an 05 reg model for £1,000 deposit and £167 per month over 34 months. This equates to a total cost of £6,678, when he hands it back at the end of the term.

Alternatively, the Parkers purchase price for that model and year from a franchised dealer is £16k and the estimated 3 year old price is £9.7k (but the car will actually be 4 years old at the end of the lease, so I'm guessing that the car will be worth about £8.4k at the end of the lease; a total loss of £7.6k).

So is this a good deal or would he be better to do a traditional purchase on a low rate loan, which would give him some sell on value for the car at the end; but he would obviously have much higher payments to make in the short term.

I hope this makes some sense to somebody.

plane_boy2000

Depends of lots of factors. Your price for that model is a bit high - there are a few of that age and model on autotrader for about 14K.

That model is about 19800 new with a predicted retained value of 48% after 3 years - about 9.5 K. but your brother in laws would be nearer 5 years old at the end (registered before September 05) so a value of 7K is more realistic.

Lots of factors to consider, but its up to him really. Aldo need to consider that he will only be able to do a restricted mileage, and have the car maintained by a main dealer etc. - Given the age I expect this is more like PCP than a lease.

Haggis_2

Thank you PB200. Yes, you're right in fact there are some for around £13k. and from BMW dealers near to us. So I think the mathematical comparison goes something like this.

I got a quick quote for a £13k. loan off an Autotrader search (probably not the best available on the market) at 5.2% over 3 years equates to a total cost of £14k. So he would borrow £14k. and be left with £7k's worth of car to sell at the end; so a total net cost of approx £7k. This compares against a lease or PCP (inc deposit) of £6,678.

His mileage is fairly low anyway so that's not a factor but the downside, as you suggest, is that he would have to stick with expensive maintenance from the BMW dealer. There's not much in it then. I think the clincher is that he won't have large loan payments to make even though he also won't have a car to sell at the end.

What does anyone think of my workings out?

plane_boy2000

Sounds about right, so if it was me I would go for the lease as you are not exposed to deperciation in the same way - i.e. if its worth 2K in 3 years thats not his problem - just hand it back!

jamesa007

Where are the best places to get a lease from for cheap nice cars? my car is packing up at the moment and i want to upgrade but cant afford to buy?;

Cheers

balsingh

When you lease a car, are you responsible to pay for everything like you would a car you owned? eg. insurance, servicing, tax etc etc.

dot111

I've been looking at the way to get a new car, can anyone recommend a company?

dora37

I lease my car from Lex and pay a little extra per month for maintenance (sorry not got figures to hand at the moment) - so all I have to do is insure it.

Lex arrange the tax and service and deal with any running problems.

https://www.lexfreechoice.co.uk

jyonda

I've found this crazy lady lease company called https://www.Lingscars.com who you will have to visit and read the customer letters section to see what I mean. They are also very competitive apparently but I can't say from my own experience as this is something I'm looking into myself at the mo.

They tax and you service.

balsingh

I have heard good things about lings cars. a few other poeple have mentioned them and had good words to say!!