Car leasing question

oligopoly

I'm close to taking out a lease - just making sure my figures are 100% correct before I do. Because of the relatively high mileage I do (25k per year), the depreciation is accelerated (pun intended!) Add in the associated repairs as the car becomes older and older and a lease starts to look more and more attractive.

Then factor in the savings on road tax, insurance, breakdown cover and fuel that a new lease car offers over a second hand car (over £100 per month in my case) and it makes even more sense.

A lease car will always have that element of unnecessary luxury to it - let's not kid ourselves that people sign up to them partly as a treat - but it's certainly not as financially wasteful as some as suggesting.

forgotmyname

Your going to save over £100 a month? I worked out the last car i had and it only cost me £50 a month in total over 5 years. Thats including changing the oil at half the service interval mileages (or less). And replacing several parts just before selling it.

amstel2, if you cannot save to pay for another lease deposit then maybe you cannot afford it. Dont forget that any damage will need to be repaired before its handed back otherwise they will charge you. Little trolley dents or scratches which you wont want to claim on your insurance may need sorting.
Mercedes appear to be hot on this, even checking the paintwork for repairs. Not just visible checks but actually going over it with a special machine that measures the thickness etc.

So maybe not just the deposit on the next car to save for, possbly a bill for repairs also if the car is below average condition for its age.

oligopoly

forgotmyname wrote: »

Your going to save over £100 a month? I worked out the last car i had and it only cost me £50 a month in total over 5 years. Thats including changing the oil at half the service interval mileages (or less). And replacing several parts just before selling it.

Good for you! I don't have the time or inclination to carry out car repairs or anything more than changing windscreen wipers - i'm happy to leave that to someone that knows what they're doing!

My current car - a 2007 BMW 320D - cost just over £1,000 last year in repairs and servicing (a blown turbo and full service) and £600 the year before (bushes, ball-joints etc). As the car gets older (25k miles each year) I think these costs will at best continue and at worse increase. The car feels old...

MataNui

I was quite negative about a lease.
The thing is the advance rental is typically 3 months. So on an average car with average payments of say 250 per month thats going to be £750. If its a 36 month lease you only need to save £20 per month to make sure you can hand your car in then get a spanking new one at the end of the lease.

So if you are looking for payments of 250 make sure you can afford 270, its simple. If you cant afford the extra then you cant afford to be driving that car. Lease is different to buying in that there is no advantage at all to making a higher 'deposit'. You would be better saving it for your next car. Just be careful. With a lease its very easy to trade in your old car or raid your savings to make a higher 'advance rental' to put you in a car you really cant afford to be in and will never be able to replace when it goes back.

oligopoly

MataNui wrote: »

Lease is different to buying in that there is no advantage at all to making a higher 'deposit'. You would be better saving it for your next car. Just be careful. With a lease its very easy to trade in your old car or raid your savings to make a higher 'advance rental' to put you in a car you really cant afford to be in and will never be able to replace when it goes back.

Exactly. When I compared 3 months down with the higher monthly payments with 12 months down with the lower monthly payments, they total the same at the end of the lease period. One thing I've read to be wary of is if you had issues with the car and were permitted to terminate the lease early, you would lose any down-payment, so possibly better to go lower deposit and higher monthly payments although I appreciate this looks worse for cash-flow...

amstel2

MataNui wrote: »

I was quite negative about a lease.
The thing is the advance rental is typically 3 months. So on an average car with average payments of say 250 per month thats going to be £750. If its a 36 month lease you only need to save £20 per month to make sure you can hand your car in then get a spanking new one at the end of the lease.

So if you are looking for payments of 250 make sure you can afford 270, its simple. If you cant afford the extra then you cant afford to be driving that car. Lease is different to buying in that there is no advantage at all to making a higher 'deposit'. You would be better saving it for your next car. Just be careful. With a lease its very easy to trade in your old car or raid your savings to make a higher 'advance rental' to put you in a car you really cant afford to be in and will never be able to replace when it goes back.

Thanks for pointing that out never thought of it like that So factor in a future advance rental plus a % for inflation in 3 yrs time.