Leasing / Car Loan

Grooveshark

Evening all.

Me and the mrs are expecting our first kid in a few weeks and we're looking to get a new, larger car probably after Xmas when she's returned to work full time.

We currently have a Suzuki Swift '06 plate and my ClioSport 172 02' plate. Without a doubt the Clio has to go *sniffsniff*. I love it but its neither economical nor in the slightest bit roomy for a baby seat and travel system in the boot. Plus, it has turned into a major money pit and has cost near £2k in repairs in the past 12 months.

I was initially looking at getting a second hand motor and getting a loan from the bank to finance this. Then I read a few threads on here about leasing, which seems to make more sense, especially when you consider the fact that I could factor in maintenance, VED into the overall price. My worry about buying second hand with a bank loan is that, something could go drastically wrong mechanically with the car after 6 months and we'd be snookered.

So leasing seems ideal in that respect but of course then I'd have no capital at the end of the leasing agreement - would I? So I presume I would then have to find another £1000 to put down to start another lease.

I'm really not fussed about owning a car in that sense, or having it as an asset, just what's best for us financially.

Hope all that makes sense...!

albionrovers

To me, leasing is pay as you go motoring. Balloon payment every time you have to renew except for the 1st time cos most folk have a car to sell which covers this. I don't really get the maintenenace thing cos it's a brand new car? Personally, I don't take the maintenance add-on nor have I ever needed it.

Grooveshark

albionrovers wrote: »

Personally, I don't take the maintenance add-on nor have I ever needed it.

Diesel cars tend are quite expensive to service I thought, so that's why I thought maintenance would be a good idea? Although obviously this would need to be weighed up against each car as they all have different service intervals.

RDG

A good second hand car will always work out financially better than new, be it leasing or otherwise. Obviously provided it doesnt have a major failure you have an asset that is depreciating but at a slower rate than a new car. Picking the right second hand car can reduce this risk significantly.

With a lease car there is no risk to you as the car will be under warranty and if there is a problem it should be sorted. But you are only paying to rent the car and therefore it has no residual value to you at the end of 3 years.

Whether the maintenance is worth while depends on the monthly cost compared with the cost over the time you will have the car. You are going to have 3 services and 2 sets of tyres at most I would think. So once you know the car you want ring some dealers and get prices for the service intervals.
I suspect you will find that its cheaper to save the money up yourself rather than have maintenance included.

Balloon payment every time you have to renew except for the 1st time cos most folk have a car to sell which covers this

For a lease there is no balloon payment, there is usually a 3 -6 month deposit and thats it.