Lease/Buy

ACG

Im sure this has been argued and debated until the cows have come and gone, but i just wanted to query something...

My dad works for a car lease company (dont worry this is not a shameless plug) so im sure i could get a decent deal on whatever i wanted but i have been on the website of the company he works for just to see what the normal prices would be.

So just as an example, Suzuki SX4 £150 + VAT (£180) plus £450 deposit. Over 3 years that equates to £7k give or take.

I went on autotrader to see what i could get for £8k (£1k more) under 4 years old with less than 30,000 on the clock and to say my choices were limited would be an understatement. It was pretty much limited to Corsas, micras (i hate micras) and the odd other car.

So doing some maths:
£8k purchase price
£3k resale price (Probably generous for what would be a 6 year old corsa).
= £5k overall cost

So for an extra £55 a month i could have a nice brand new comfortable car.

If the resale was £2k then it would be £27 a month.

This is all assuming i pay the going rate and my dad doesnt give up any of his commission.

Am i missing something?

I only passed my test 2.5 years ago, i have had a corsa during that period which is great but i am starting to get busier and doing more driving so i would like a bigger more comfortable drive in the next couple of months.

Im not necessarily saying i want the Suzuki SX4, its just an example of a bigger car.

Captain_Flack.

Is the Suzuki really a bigger car? Looks mini sized to me.

ACG

OK, other similar priced cars nissan juke or chevrolet trax.

It was just an example car really, i meant higher up rather than bigger.

bigjl

I consider leasing as a good option for business use and for those who want a no hastle shiny new car every few years without the problems of long term ownership

Leasing by its very nature will be more expensive in the long run as you never own the goods.

Unless you get the sort lf lease were you dispose of it for the financd company at the end of the deal and then give a small percentage of the agreed final value

Though you can't sell it to yourself. So most people "sell" it to a friend.

You will find it difficult to compare a new and old car based on price or cost to you

Best idea may be to discuss this with your dad.

WellKnownSid

bigjl wrote: »

Leasing by its very nature will be more expensive in the long run as you never own the goods.

Not always. I do own a couple of cars but also lease one car for business use. On paper it would cost £17k to buy, but over the two year / 30,000 mile lease will cost me a total of £4k + VAT (10% as I'm VAT registered). It'll depreciate at least double that in the time I've leased it. No matter how favourable you make the maths, or how long you intend to keep the car as a private purchase - buying will be more expensive in the long run (especially as servicing, repairs and MoT costs mount).

There's no catch particularly - when you lease, the car will never be yours but will instead be owned by a finance company who'll probably be buying 10,000 similar cars from the same manufacturer. As a result they'll be buying the car for a hefty (say, 50%) discount, not available to a retail customer (manufacturers put restrictions on the deal to prevent this). Plus there are also tax benefits too if you run a business.

The trick - as always - is to find the best deal rather than going for a particular vehicle.

The downsides? It's a new car - so you'll have to look after it - although they won't expect a showroom condition car on its return, they will expect reasonable care to have been taken.

Insurance may be higher - you won't actually be the owner or the registered keeper, and some insurers don't like that - so with limited experience / no claims history as well it may limit your options for cheap cover. Get quotes.

You'll need a special form from the finance company if you want to take the car overseas. Once again, because it's not your car.

Hope that helps!

ACG

Thanks for the replies. Insurance is a good point, i never thought of that.

Appreciate its difficult to make a comparison on price, but i wanted to double check the sums i did were not missing anything big or glaringly obvious out. It does seem like a bit of a no-brainer though even without any discount my dad can get.

I will do some quotes on insurance just to see what sort of impact that will have before making any decisions.

arcon5

£2k resale value on the lease car? What's this for? You hand it back at the end, not sell it..

ACG

arcon5 wrote: »

£2k resale value on the lease car? What's this for? You hand it back at the end, not sell it..

Have a re-read.
The resale value is if i purchased a car.

arcon5

Not always. I do own a couple of cars but also lease one car for business use. On paper it would cost £17k to buy, but over the two year / 30,000 mile lease will cost me a total of £4k + VAT (10% as I'm VAT registered). It'll depreciate at least double that in the time I've leased it. No matter how favourable you make the maths, or how long you intend to keep the car as a private purchase - buying will be more expensive in the long run (especially as servicing, repairs and MoT costs mount).

If you own a couple of cars and this was is in fact exclusively for business use then you should be reclaiming the full 20% vat and not going by the 50% rule.

WellKnownSid

arcon5 wrote: »

If you own a couple of cars and this was is in fact exclusively for business use then you should be reclaiming the full 20% vat and not going by the 50% rule.

It's not exclusively used for business - being a modern sub 100g/km CO2 car it's actually cheaper to use that for some personal miles plus commuting (at 65mpg vs 28mpg or 32mpg it more than offsets any VAT saving.)

Hintza

WellKnownSid wrote: »

The trick - as always - is to find the best deal rather than going for a particular vehicle.

This is the most important sentence in this post. Go for the deal and not the car.

Before 2008 there were cracking deals these have diminished substantially in the last few years, but there will still be some.

You must do your sums very carefully.

If you chose the car and not the deal then leasing will probably be more expensive.

To get deals you need to look for unpopular cars and cars where a facelift model is coming out (you want the old one). One of the reasons we had a series of Chryslers and Jeeps.