New car - but how to buy?

typeractive

Hi all,

I'm in a bit of a pickle. I want a new car (ideally a small SUV from a German brand - X1, Q3, Tiguan etc). Has to be small to JUST squeeze into my garage. I know such cars aren't money saving, so let's save the lecture on that. Ideally, I'm looking to a young second hand model ideally with lots of options (this obviously narrows my search) but also considering leasing something from new.

I currently have a car worth probably £12k on the market, dealers will probably want to offer something like £10k. I'm pretty clear on what happens if I trade in and buy a car - that's simple.

However, could I trade my car in on the lease deal? What happens after the lease? If I use the car as a large deposit and bring down the monthly payments etc, then when I 'hand the car back over' do I just start from scratch again? Or is there some value in the car from my deposit still which can contribute to the next lease deal? (hope I'm making sense?).

I'm calculating I'll be doing something like 20k miles per year too, so if leasing I need a deal with a cheap pence per mileage if I go over. I want a comfortable, reliable and somewhat stylish car as I will be doing a lot more miles than current.

I often hear people say they have a 40k car on lease and pay generally around £300 - £350 per month but when I'm looking at these kinds of deals they don't seem to be findable?

Any advice would be great.
Cheers

traceyed1

hi i have ordered a new lease car (sportage) through a company called jet vehicle finance they were by far the cheapest when i was looking myself. there is a comparison site for leasing which i used to find my deal. loads of different deals on there through various leasing companies.
http://www.contracthireandleasing.com

tacpot12

At the end of the lease you start from scratch. All the value in your old car is lost as it is used to reduce the amount you are effectively borrowing.

thescouselander

With a straight lease you're correct in thinking you hand the car back and start from scratch.

It might be worth looking at PCP which is similar to leasing but you could end up with a bit of equity in the car by the end of the term to help with the next purchase (although this isn't guaranteed). It would also give you extra options if you went over your 20,000 mile limit as you could pay the balloon payment and keep the car if that works out better than paying the excess mileage.

Mercdriver

I'm perfectly happy to be corrected if I am wrong, but the deposit for a lease is a fixed amount of advanced lease plus a fee. You can trade in the car, and you'll get the difference between the advance payment and the value of your car back as cash.

If you choose a PCP, you can put the whole value in as a deposit to reduce the payments, or decide how much you can realistically afford a month and change your deposit accordingly. So say the amount to pay a month your comfortable with is £250 a month and £3,800 is the deposit that will achvieve this amount, then you get £6,200 back. Up to you what you do with it, but remember that at the end of the term, you have a choice to keep the car by paying the balloon payment, handing it in and walking away, or start a new one. You'll need a deposit again, though this might be offset by some equity in the car.

It wouldn't be a bad idea to put this or part of this money into savings (though of course the rates aren't great) as your car fund. This means you have the means to start it off again or something towards the balloon payment.