Help regarding new lease car options

Miss_J

Hi

Hoping that someone can help guide me with regards to lease car options.

I have had lease cars since 2010 when I got my first lease car via salary sacrifice working in the NHS.  I had a couple of different lease cars through my BUS trust up to 2019 when I had to hand back my lease car as I moved Trusts and as my new trust had a different lease company I couldn't move the lease deal with me at the time.

As I needed a replacement car I got a lease directly through Ford and since then have been paying  monthly lease cost to Ford without any problems.  This lease is due to expire in December Nd I have the option to the car back to Ford and walk away, part exchange the car for another Ford (although 8 months ago the dealer told me I was in negative equity) or pay a balloon payment and keep the car.

A colleague has recommended that I sell the car through a 3rd party as I will make more money and then have a decent deposit for another lease vehicle. I don't really understand how this works.

Alternatively I could hand the car back and enter into another lease through the BUS although these seem extremely costly compared to what I was paying 3 1/2 years ago.

Really looking for some guidance on what my best options are regarding this.

Grumpy_chap

Can you confirm:
1. Is the current car vai Salary Sacrifice?
2.  Is the current car a lease or PCP?  Based upon the options you describe, it sounds like a PCP:

Miss_J said:

This lease is due to expire in December Nd I have the option to the car back to Ford and walk away, part exchange the car for another Ford (although 8 months ago the dealer told me I was in negative equity) or pay a balloon payment and keep the car.

Given the current availability of new cars and resulting higher used car prices, I would expect most cars nearing the end of a PCP to have some worthwhile equity accrued.  The Ford dealer may be trying to pull a fast one by saying negative equity, or there may be genuine reasons such as damage or mileage far higher than the PCP was structured for.

What is the car?
What age & mileage is it?
What is the balloon payment?
I assume you made all the regular payments as they were due, or did you take any payment holidays at any point?

It is easy to check the value for the car online as an initial indication use a site such as WBAC.  That will allow you to assess the option of buying the car or selling via another outlet than Ford.

Would you be happy to keep the current car and use it going forward?  That is likely to be the most cost-effective solution and you know the history of the car.  

Beyond that, any consideration needs full understanding of the numbers and your requirements in terms of car type.

TadleyBaggie

As above, if it is a true lease, part exchange or selling is not allowed. 

iwb100

Yes it sounds like you have a pcp and not a lease. The first thing you need to do is determine how much you have left owing on the vehicle. You should be able to do this online or failing that ring up the finance company and ask for the settlement figure.

Then get to the online websites and see what your cars value comes back as. We buy any car, Cazoo, motorway all offer a valuation. Then you know whether you have positive equity or not.

Assuming it’s positive equity the difference between the two values is what you can if you choose use as a deposit in a part exchange deal for a new pcp. And ford should offer you that sort of equity for a new deal. Alternatively you can sell the car to someone like wbac who will clear your finance for you and give you the rest of the cash. 

Note that you can use the part exchange equity at any dealer so you don’t need to go back to ford. In your position I’d first find out what my equity was then look on auto trader at what in stock cars there are. You will have a better bargaining position at something in stock. Then go from there….

flashg67

If it is a PCP, then you can sell the car and use some/all of the funds to pay off the finance, and keep anything left over. Not many private sellers will be happy with this, but dealers do it all the time. I sold my last PCP through We buy any car. I took along my finance settlement amount letter and they paid it off and sent the balance to my bank.
As already said, I'd be surprised if you were in negative equity given the current used car prices  - be aware that new cars can be on long lead times unless you're happy to accept a car from stock, and aren't fussy about colour/options etc
If you like the car, you can look at a loan to refinance the balloon payment then and keep the car

Miss_J

Thank you all for your comments.  I have reviewed my account tonight and it is classed as:
'retail hire purchase options' or 'options cashplan'.

I have checked the value with Webuyanycar.com and the value they give is £2200 above the settlement figure that Ford have given me.  I know there are a couple of dents and scratches which would bring the value down so I would get these sorted before returning the car, I"m used to this in order to not attract penalties with previous lease cars.

So I think from what others have said I can resell the car and use the amount to pay off the finance figure from Ford and use the remainder for a deposit.  Is this right?

If looking for another car via finance is this the type of deal I should be looking for again?

I'm really appreciative of all your guidance with this.

iwb100

Miss_J said:

Thank you all for your comments.  I have reviewed my account tonight and it is classed as:
'retail hire purchase options' or 'options cashplan'.

I have checked the value with Webuyanycar.com and the value they give is £2200 above the settlement figure that Ford have given me.  I know there are a couple of dents and scratches which would bring the value down so I would get these sorted before returning the car, I"m used to this in order to not attract penalties with previous lease cars.

So I think from what others have said I can resell the car and use the amount to pay off the finance figure from Ford and use the remainder for a deposit.  Is this right?

If looking for another car via finance is this the type of deal I should be looking for again?

I'm really appreciative of all your guidance with this.

If I were you I’d sell it and clear the finance and then look to actual leasing…called personal contract hire…

You have a chance of a really good deal there. Look at online comparison sites to see what the best lease deals are….if you aren’t too fussy (and you need to look for in stock deals)…then you could get a decent deal.

If you opt for a pcp you will need to again look for in stock options. Factory orders for cars are twelve months wait in many cases.

Grumpy_chap

Miss_J said:

Thank you all for your comments.  I have reviewed my account tonight and it is classed as:
'retail hire purchase options' or 'options cashplan'.

So I think from what others have said I can resell the car and use the amount to pay off the finance figure from Ford and use the remainder for a deposit.  Is this right?

If looking for another car via finance is this the type of deal I should be looking for again?

"Options" is the Ford branding for their PCP finance product.  Car manufacturers / dealers are not always the most complete when providing information about the choices at the end of the scheme, so the Ford website offers:

Renew
Choose another car

Your chance to drive another new Ford Car.  You can trade your old car in or sell it privately.  Once you’ve fully settled your account (including the Optional Final Payment) any money left may be used as deposit for your new Ford Car.

Return
Hand the car back

Assuming all monthly payments have been made, you’ll have nothing further to pay, providing the car is in good condition and the agreed mileage hasn’t been exceeded.

Retain
Keep the car

If you decide to keep the car, assuming all monthly payments have been made, you just need to pay the Optional Final Payment plus the purchase fee and it’s yours to drive away.

Those choices are written to strengthen the likelihood that you change to another Ford.  There is nothing mentioned about buying another car from another brand or used.

Return and walk away is only a good choice if the car is in negative equity.

With the "renew" and "retain" choices, you are free to sell the old car to anyone and to buy a new car from anyone.

In the current market, car prices are inflated and availability is low so that may restrict the new cars that are available for December if you decide on that route.  Are you constrained by your job for the age of the car?  If not, have you considered paying the balloon and keeping the current car?  That is likely to be the most MSE solution (assuming the car is in good order).

Petriix

If you're eligible, I'd strongly recommend looking at getting an EV through salary sacrifice. The tax and fuel savings are enormous. If you can charge at home then you can also save hundreds on your home electricity bill by switching to Octopus Go and using the cheap window for your home usage.

Miss_J

Grumpy_chap said:

Miss_J said:

Thank you all for your comments.  I have reviewed my account tonight and it is classed as:
'retail hire purchase options' or 'options cashplan'.

So I think from what others have said I can resell the car and use the amount to pay off the finance figure from Ford and use the remainder for a deposit.  Is this right?

If looking for another car via finance is this the type of deal I should be looking for again?

"Options" is the Ford branding for their PCP finance product.  Car manufacturers / dealers are not always the most complete when providing information about the choices at the end of the scheme, so the Ford website offers:

Renew
Choose another car

Your chance to drive another new Ford Car.  You can trade your old car in or sell it privately.  Once you’ve fully settled your account (including the Optional Final Payment) any money left may be used as deposit for your new Ford Car.

Return
Hand the car back

Assuming all monthly payments have been made, you’ll have nothing further to pay, providing the car is in good condition and the agreed mileage hasn’t been exceeded.

Retain
Keep the car

If you decide to keep the car, assuming all monthly payments have been made, you just need to pay the Optional Final Payment plus the purchase fee and it’s yours to drive away.

Those choices are written to strengthen the likelihood that you change to another Ford.  There is nothing mentioned about buying another car from another brand or used.

Return and walk away is only a good choice if the car is in negative equity.

With the "renew" and "retain" choices, you are free to sell the old car to anyone and to buy a new car from anyone.

In the current market, car prices are inflated and availability is low so that may restrict the new cars that are available for December if you decide on that route.  Are you constrained by your job for the age of the car?  If not, have you considered paying the balloon and keeping the current car?  That is likely to be the most MSE solution (assuming the car is in good order).

I really need to change the car.  I was talked into taking on a 3 door model when I got this car from the dealer.  It's proven to be really unsuitable for a busy family of older teenagers and a dog.  There are no windows that open in the back either.  I'm not fussy about the car I drive, always been guided on availability and cost.  I don't want to be paying an extortionate amount each month for a flashy car, would prefer something that it reliable and practical.

Miss_J

Petriix said:

If you're eligible, I'd strongly recommend looking at getting an EV through salary sacrifice. The tax and fuel savings are enormous. If you can charge at home then you can also save hundreds on your home electricity bill by switching to Octopus Go and using the cheap window for your home usage.

Yes, I"m eligible and have been looking at lease cars through salary sacrifice however these are really expensive at the moment, seemingly about £150 more monthly than a reasonable process monthly cost from a dealer.  Obviously the servicing, repaired, road tax etc would all be included but still seems in the long run to cost more.  Unfortunately I change get an electric charging car as I love on a small single track lane and need to park in my main village so I have no where to install a charging point.  Hybrids would be a worthwhile alternative but would attract a higher monthly repayment figure.