Car Leasing vs PCP vs Purchase if No Longer able to Drive

jimjames

My father is looking to get a new car and considering leasing at the moment. Lease would be for 4 years but my concern is that in his early 80s that although in current good health a 4 year lease might mean that he is unable to continue driving for the length of the lease. Previous cars have always been bought and kept long term but he's working on the likelihood he won't need another car beyond this lease as he'll be approaching 90 by then. 

Leasing does seem significantly cheaper than PCP and by not purchasing it means he won't be tying up that amount of capital up front but are there any other factors to consider when looking for a lease in this situation? To me the cash purchase might be a better option as it gives more flexibility if the future changes but does mean a big initial outlay (car is over £40k so VED is also a factor if not leasing)

Nasqueron

Question - why does he need a >£40k new car in his mid 80s, given you said he might have to give up driving before the term (PCP is typically 3 years+)? Why not get a second hand car after depreciation has made them more affordable given you know he's going to hand it back?

facade

There is no "easy get-out" with a lease.

To cancel, you have to pay off the rest of the lease.

So the car is going to cost the total of the lease payments no matter whether you keep it for the full term, or send it back after a week.

jimjames

facade said:

There is no "easy get-out" with a lease.

To cancel, you have to pay off the rest of the lease.

Thanks, that was what I suspected but the quote he's been given doesn't give any terms and conditions on it.

Nasqueron said:

Question - why does he need a >£40k new car in his mid 80s, given you said he might have to give up driving before the term (PCP is typically 3 years+)? Why not get a second hand car after depreciation has made them more affordable given you know he's going to hand it back?

What you need and want aren't necessarily the same thing! Nothing wrong with current car but wanting something special while he can I guess and not worried about losing winter fuel payment

XRS200

VED will be factored into the lease cost.

What about a shorter lease - doesn't have to be 4 years.

Arunmor

As above I think a two/three year lease would be better.

But if he's anything like my deceased mother, she will do it her way and sod everyone else.

Just reduce the term if you can and keep him happy (assuming all his marbles are still in place)

Herzlos

If he gives up driving, will you be taking over the car and driving on his behalf? If so a lease isn't going to be as risky assuming the lease company allow someone else to drive whilst the owner can't.

Otherwise a PCP may cost a bit more but will allow you to buy out of it at any point at market value. He'd still take a hit but he wouldn't need to pay off the full lease.

jimjames

Thanks everyone. Lots of food for thought for conversation. If leased and unable to use then it's unlikely anyone in the family would want to take it on so PCP or outright purchase is probably the safer option. 

DullGreyGuy

jimjames said:

Thanks everyone. Lots of food for thought for conversation. If leased and unable to use then it's unlikely anyone in the family would want to take it on so PCP or outright purchase is probably the safer option. 

PCP isn't that different from a Lease, though it depends on the exact numbers; on our 3 year lease the vehicle was still worth over 50% at the end of the contract so no voluntary termination rights crystallised (though given it was not a CCA regulated agreement not sure voluntary termination rights existed even if it had).  Obv you could sell the car but you are likely to be in negative equity outside of voluntary termination so still an extra payment to give it up. 

Herzlos

To break a PCP it'll cost you (outstanding balance - car value), which is variable.

With a lease it'll cost you ((remaining months * monthly payment) + any damage and presumably return costs).

Goudy

Buying is probably going to work out the cheapest way, perhaps utilise a PCP for a discount and then settle.
That's if he has the money 

If he does have to give up driving then it should be easier to deal with the car.

Another suggestion might be a shorter term lease.
It will work out more expensive than a longer term lease but he wouldn't have two or more years hanging over him if he did have to give up in 12 months.
Perhaps do a 48 month lease and see where he is at after that, if he's still keen do another one for 12 months.