Car HP/Leasing - should I go down THAT road?

PrincessJR

Hi,

I have always been firmly in the camp of the "I like to own my own car" set, and have never seen finance (renting a car!) as an option for me.

However...I have recently been having problems with my 2008 Nissan Qashqai which will cost me over £1000 to resolve and I have started to wonder if I wouldn't be better off (in terms of peace of mind) in the long run considering purchasing a car on HP (Hire Purchase).

The main appeal to me is having the additional maintenance cover, so if anything were to go wrong with the car, I could drive into the dealership and have it resolved as part of my package.

I'd like to hear from anyone who has converted to HP from being an outright car owner, as to whether you regret the decision, or have found it wonderful!

As we have 2 small children I would need something of a decent size really so have been considering the Kia Sportage or the VW Tiguan, both roughly £200-£240 per month including maintenance cover.

My main worry is that if I sell my Qashqai and put the money down as a deposit, then decide it's not for me, I have NO money to buy another car outright I guess I'm just used to the ownership part of things but when older cars go wrong, it seems they can cost as much if not more than leasing would anyway!

Any experiences appreciated

forgotmyname

HP = a loan to purchase the car. Not the same as leasing.

With leasing you basically rent it. At the end of the rental period you have nothing to show for the money.

Your issue with the lease is that your stuck with it for the entire term unless you buy yourself out of it. Basically paying to rent a car you no longer have the use of.

Say a 3 year lease, 6 months in your financial situation changes dramatically. You still have the rest of the lease to pay for.
Happens more often than you think.

Search the threads on here where people need desperately to get out of their lease contract.

You car may need £1000 now but if looked after then there shouldnt be any major bills. And that £1000 is less than 6 months lease..

wymondham

If you're thinking about HP, then why not follow through and just lease your car?

For a monthly payment you could rent your car for 2/3/4 years whatever and include maintenance (which also includes tyres etc). This way the car is within warranty and also no extra costs....... just a thought...

I was in this position a while back and through all the pros and cons. Some chap I know in a dealership said to me 'why own a fast depreciating item? - let someone else have that worry..' , one other interesting point was that a cars resale value will very much in the future depend on the tech they have in them - if you have old tech (over a year) then this will really hit resale values.... much more than mileage etc does... interesting thought!

misterbarlow

I'm on my second 3yr lease car, it just got delivered last week actually..

People argue you end up with nothing leasing, as said above 'you have nothing to show for the money", but I thought about every car i'd ever owned.. and its the same story! For me anyway!

I take out a loan, plus interest, buy a car, then as soon as the loan was paid off, I always wanted to replace it asap, so I sell it and start all over again..

eg I got a 10k loan over 4 yrs, interest was say about another grand ish so £11k, and bought a nearly three year old car for £10k.
Paid it off 4yrs later and sold the car for just over a grand...

So that car basically cost me £10k to have over the 4yr period, so £2500 a year to have it, and at the end it was only worth 1k..
All I had to 'show for my money' was a car worth a grand that I paid eleven grand for!! You still lose ten grand!
You might end up with the car, but when it depreciates to a grand and costs a bomb to MOT every year, that's nothing spectacular. really.

For £2500pa I could lease one and be not much worse off at the end of it, but with no hassles, no worries, no unexpected MOT failures, economic, cheaper to tax, and total peace of mind of driving a nice brand new car..

So I did it, and loved it.. and renewed recently for another and pushed the boat out a bit.. Got a Seat Ateca, which is awesome!!

ratrace

Op, watch this it may change your mind

https://www.youtube.com/watch?v=t1NaDucAXIg

Mercdriver

I think leasing is all fine and dandy when you have the money coming in to support it. Get ill and not protect yourself via income protection and things could get hairy. I don't think there is a single one size fits all answer to the question yet people continue to ask the questions as if it is. Some may be better off keeping a certain amount of money aside each month to self insure against big bills and then if the worst should happen you have a car that won't get towed away due to non payment and a shot credit record that prevents you getting a car on credit.

What position are you in financially? Secure job? Will the car be used as part of your job?

loskie

You can lease for just one year. I have from Affinity Leasing. An Astra 1.4 turbo elite, mettalic paint and parking sensors for 15000m in 1 year. £460 up front then £154 per month after. No point in taking maintenance at this length/miles contract.
Car was delivered May to SW Scotland on a trailer from Stoke. 7 miles on the clock.

goosander

Up until now I've always owned my cars, either buying on HP or bank loan or latterly for cash but have just signed up for a 2yr lease on a new car.

Why? Well if I were to buy the same car on the same monthly payment, it would take approx 10 years to pay for. This way, I drive a new car with known fixed costs and hand it back with no hassle and look for the next deal. If my circumstances change, yes I'll be tied in to paying for the car (but have enough savings to cover) but then again if I had bought it, I would likely lose just as much selling it.

Leasing is all about the deal - if you aren't fixed on a particular model of car, you can find very good rates on certain models. Others though, are poor value to lease.

Is leasing money saving? Not really - it will cost more than running a sensible used car but may well be cheaper than buying a new car especially if you change cars regularly.

I reckon my current middle aged car costs me roughly £70pm in depreciation, repairs, MOT, road tax and breakdown cover. My new one will be £198 for a much nicer car. For me, paying a premium of £128pm to drive a new (hopefully) hassle free car is worth it.

I guess for me its an experiment, I'll see how it works out. Really the only thing that concerns me is that someone damages it in a car park and leaves me with a load of damage I have to pay to fix prior to returning.

Nebulous2

I've always owned my cars, with a mix of older big cars and new mid-sized cars. I'm not fussed about owning however and try to work out at least roughly the total cost of ownership.

I have a lease option through my work, but I don't do as many work miles as most of my colleagues, so it doesn't work out for me.

Just a final thought though, if you are willing to go small or unfashionable there are some great deals to be had. Last year I found a Seat Mii city car for £57 a month over two years. £171 up front then 23 payments of £57 for 8000 miles a year. Servicing could be added for a further £100 up-front.

Some people I know are paying more than that for a phone!

thescouselander

Yeah, I owned my last car but my current car is on PCP. The costs are equivalent - either way you end up paying for the depreciation. The advantage with finance is that if there's any problems there's an additional route to get it sorted as the Finance company are jointly liable for the quality of the car. Its quite useful to be able to phone them up and inform them their car has gone wrong and ask them how they going to fix it.

Bumblebear

I've just (yesterday), signed the forms for PCP on a new car - my old banger was just costing too much to keep roadworthy, it was getting thirstier and thirstier, and I need a car for work (I work and volunteer in a rural location, no public transport, need to physically be there). I got to the point where I figured I couldn't afford not to - I wouldn't have a job to go to if I kept "not being able to get in" because my car was jacked up in the garage again (that's a bit extreme perhaps, I don't know what the policy is, but it was causing issues and stress). The monthly costs of my new car are equivalent to a) how much I was paying to maintain and repair my old car b) savings on tax and c) picking a very fuel efficient new car. Heck, depending on how the last one goes, I may even be in profit on a monthly basis.


I've got a 4 year deal with the option to purchase at the end. Yes, I am pretty wary of "what if something happens". In fact the "if something happens" might well be me taking time out of work to start a family, but that's budgeted for. If the "something happens" involves me not working full stop, the payments are low enough for hubby to cover with his salary, and if I'm not working then I don't NEED that car, we can sell his and he can use it. He's in the forces, so pending any major mistakes, his terms of employment are pretty solid.


It's all about risk and circumstances really. For me, the old banger had recently cost £700, and then needed more than it was worth to put it right again. I have to cut my losses there.


A final point, Nebulous2 is right, if you're not fussy about badges, trims, colours, chrome bits, then there are some great deals out there.