Car leasing question

amstel2

Hello

I have been looking at leasing a new car. I have never financed a car this way before.

If I go for this I would probably go for the 36 month option.

Now I know this sounds a bit thick but what does the phrase “advanced rental” actually mean. Most of the deals I have seen require between 3 & 12 months advanced rental. So for example if I was to pay 3 months advanced rental now would that mean no more payments for the next 3 months or is the advanced rental some kind of a security deposit & if it is would I get that back at the end of the rental.

Thanks

BeenThroughItAll

amstel2 wrote: »

Hello

I have been looking at leasing a new car. I have never financed a car this way before.

If I go for this I would probably go for the 36 month option.

Now I know this sounds a bit thick but what does the phrase “advanced rental” actually mean. Most of the deals I have seen require between 3 & 12 months advanced rental. So for example if I was to pay 3 months advanced rental now would that mean no more payments for the next 3 months or is the advanced rental some kind of a security deposit & if it is would I get that back at the end of the rental.

Thanks

It's an upfront payment.

No, you don't get it back.

bengalknights

No this is the amount you pay upfront so in this case it would be 3+35

Where the 1st payment is 3 months worth and the second payment onwards is one month.

amstel2

bengalknights wrote: »

No this is the amount you pay upfront so in this case it would be 3+35

Where the 1st payment is 3 months worth and the second payment onwards is one month.

So wouldn't that mean the 36 months advertised is misleading. It is actually 39 months.

BeenThroughItAll

amstel2 wrote: »

So wouldn't that mean the 36 months advertised is misleading. It is actually 39 months.

No, the lease length is 36 months. It's just your first payment is equal to 3 months' worth of payments.

MataNui

Cars depreciate.
If you lease it for 3 years it will probably lose anything from 60 to 70% of its value. You will be the one paying for that (plus giving the lease company a bit of a profit as you go).

You will either pay for it with a larger initial payment and smaller monthly payments or a smaller initial payment and larger monthly payments.

At the end you will hand the car back and have nothing. You will then need to find another “advanced rental” If you want another new car.

amstel2

MataNui wrote: »

Cars depreciate.
If you lease it for 3 years it will probably lose anything from 60 to 70% of its value. You will be the one paying for that (plus giving the lease company a bit of a profit as you go).

You will either pay for it with a larger initial payment and smaller monthly payments or a smaller initial payment and larger monthly payments.

At the end you will hand the car back and have nothing. You will then need to find another “advanced rental” If you want another new car.

In my case at the end of the lease I would have to manage without a car for a few months while I saved up the next advanced rental. Don’t think this leasing thing is a good Idea after all.

Maybe better to go for a nearly new on a PCP or car loan.

System

I believe this is an apt description....

wymondham

not necessarily a bad option.....

I leased a Seat 2.0 FR over 3 years. The new price was £24k, after 3 years they offered it to me for £9k that's £15k depreciation over 3 years. I didn't pay anywhere near that in my payments.... depends on the car and deal...

thescouselander

Cars depreciate however they're financed - often leasing can work out the most cost effective way if the deal is right and the advantage is the up front payment is small vs a PCP or HP arrangement. If you can't save up 3 months advance rental for the next car over the 36 month lease of the current one then can you really afford a new car at all?

Cornucopia

amstel2 wrote: »

In my case at the end of the lease I would have to manage without a car for a few months while I saved up the next advanced rental. Don’t think this leasing thing is a good Idea after all.

I can't imagine any car being purchased without a few hundred pounds down, one way or another. For me, leases work best at the bottom end of the market and with high-end cars with lower than average depreciation.