Car Leasing? Hire? Financing?

Kosenurm

Hi all,

I have just got a new job which includes a £5000 per annum car allowance. I will need to get a car in order to travel to and from work.

I have worked out that I'll have around £200 per month to play with in order to pay for the car. I'll travel around 25k to 30k miles per year. Fuel and insurance is paid for already. Maximum deposit I could afford is around £500.

What's the best option for me?

I am not bothered about owning a car at the end of the period if leasing, as I'll likely just change it for another vehicle anyway. I'm also not bothered about the type of car, but would prefer for it to come with as much as possible (naturally ).

Many thanks.

forgotmyname

If you take a 2, 3 or 4 year lease will you be able to afford to keep paying it if the job turns out not to be what you want? Or your not what they want?

Do they have any restrictions on the car? Must be a certain size,age mileage limits etc?

mad_rich

As above - are you sure you want to enter into a medium-term contract, that might be difficult to get out of if your circumstances change?

Leasing - your annual mileage will count against you (most lease deals will quote a headline rate for 10k or even 8k miles pa), so you'll have to do the calculations carefully. (Although sometimes, choosing a deal with a low milage allowance then paying the extra can work out OK.)

As an example (not a recommendation for this car or this lease firm in particular), just the first one that came up, this is how it might work for a Kia Picanto

£468 deposit, then £156/ month for 3 years. 20k miles pa allowance.

You'll also need to budget for servicing, and extra miles (tend to be somewhere between 5 and 15p per mile, but check). Assuming it's 10p/ mile excess and an annual mileage of 25k, you're looking at £1500 in excess mileage over the 3 years, or £41/ month. That's still under budget (just!) but we haven't paid for servicing yet.

I'm sure better deals are available, and you can get servicing included (at a price).

When you say fuel and insurance are 'paid already' what do you mean, and by whom? If someone else is paying for the fuel, and doesn't care about the cost, then you could probably find a good deal on something with an older, inefficient engine. Cheaper lease and you don't care about the fuel!