Leasing cars...

tichbourn

Hi, Am I right in thinking that if a company leases a car for a few years, then the company are responsible for insurance, road fund licence and paying for service and repairs? I'm trying to evaluate the pros and cons of leasing cars - I assume that as a company wouldn't own a car then there would be no depreciation charge

Spicy_McHaggis

All depends on the term of the lease as to what's thrown in. One things for certain you're paying for the depreciation.

SmellyPetrol

So there are a few options really, depends on the entire 'package' of the lease contract.

You can get maintenance included (which covers for chips, repairs, MOt's etc etc)
I think sometimes the RFL is included, but again - depends on the contract
Insurance always has to be fully comp

Driver responsible for fair wear and tear, so make sure the car is looked after plus other bits, effectively the car isn't yours if you go for a contract hire agreement.

Sometimes it makes sense for some industries to lease their cars, like estate agents who always need a posh motor to show off to their clients!

forgotmyname

The leasing price covers the depreciation on the car and some profit for the lease company.

If it didnt then they wont be leasing cars for long if they dont cover their costs. Although generally their costs are lower, They get better discounts on the cars than any private buyer will get so a good starting point.

Brooker_Dave

tichbourn wrote: »

I'm trying to evaluate the pros and cons of leasing cars

Lots of people lease cars these days, which is why when you drive through council estates, they're littered with new cars.

Pros:

You can pretend to be rich for £200 a month.

You don't need to worry about depreciation.

You can drive a Mercedes you could never hope to buy.

Cons:

You need to pony up the lease fee every month.

You have spunked away your asset to get to borrow someone else's for 24 months.

You are paying for depreciation so that someone less materialistic can get a cheap used car in 24/36months time.

Every dent and scratch is a problem.

If you go over the yearly mileage you'll get bummed, people are forced to park up their shiney lease car and get the bus to work when the miles get to the agreed limit.

You've lost you old car as the deposit, so like being on crack you just go from one contract to the next.

Everyone soon realises you're just a hirecar pilot.

jaybeetoo

SmellyPetrol wrote: »

Insurance always has to be fully comp

No it doesn't. My company only has third party insurance for leased vehicles. It depends on the lease.

forgotmyname

Could be expensive if something happened to a couple of the cars though. I presume the company is big enough to pay the full value of the cars if anything happened?

colino

If you or your company have anything but top line insurance cover on your car/fleet you will have signed an agreement guaranteeing the condition at end of lease with a fat penalty added if it is not to their representation of good condition.

worried_jim

Brooker_Dave wrote: »

Lots of people lease cars these days, which is why when you drive through council estates, they're littered with new cars.

Pros:

You can pretend to be rich for £200 a month.

You don't need to worry about depreciation.

You can drive a Mercedes you could never hope to buy.

Cons:

You need to pony up the lease fee every month.

You have spunked away your asset to get to borrow someone else's for 24 months.

You are paying for depreciation so that someone less materialistic can get a cheap used car in 24/36months time.

Every dent and scratch is a problem.

If you go over the yearly mileage you'll get bummed, people are forced to park up their shiney lease car and get the bus to work when the miles get to the agreed limit.

You've lost you old car as the deposit, so like being on crack you just go from one contract to the next.

Everyone soon realises you're just a hirecar pilot.

Brilliant- post of the day. Thanks Dave for putting a big smile on my face!

SmellyPetrol

jaybeetoo wrote: »

No it doesn't. My company only has third party insurance for leased vehicles. It depends on the lease.

Well i've been had then!