Buy or Lease

sarahdee

Hi,

I'm considering leasing a car as opposed to buying one. Just wondered if anyone has experience of this and could give some feedback, potential positives or pitfalls!

Thanks,

Sarah

anewman

Buy a cheap banger then it's yours outright, no monthly payments - and will probably cost less than a couple of months leasing.

vansboy

Hi Sarah!

Assuming you mean to lease the car as your own - rather than for a business - you'll find all the brands offer some form of PCP, Personal Contract Plan. Also there will be different schemes within their plans.

It's important you know what's included & whats NOT!!

The main thing to be aware of is the mileage limitations & any add on charges if you exceed agreed miles covered. You might find the distance you plan to cover is fine just now, but what if you moved, changed jobs, had to use the car more. Do consider this really carefully.

Also items like tyres, tax, (good chance the tax will increase while you run the car) scheduled maintainence can all be included, or an extra cost!! Confirm this, too.

The main attraction, obviously, is the easy to budget for monthly repayments & a guaranteed future residual price at the end. You might even make a (small) 'profit', if the model you choose holds its value!!

The dealer also does OK, as he'll have a well maintained car, that he already knows, coming back in 3 years time, to put on his forecourt as a quality part exchange, for your next one!!

Worked right, with a bit of luck & if the figures work out right, you'll actually only be paying for the depreciation allement of th cars cost. Which you'd loose anyway!!

Ask the same Q in https://www.honestjohn.co.uk clik The Backroom - Discussion for more hints & tips!

VB

zeon999

Exellent post by vansboy and not alot to add to it really other than I like how leasing works, its great if your the type of person who likes to buy new cars but gets rid of them within the first 4 years. Genrally if your going to contract the car over 5 years then leasing is not such a good option.

Figures are something you will want to run through though just to make sure your deal is worth doing, whatever deal you find. Sometimes it can workout cheaper sometimes not depending on the exact terms of the contract you want and vehicle you want.

The big advantage is fixed monthly costs with no big supprises to have to deal with, which in times of a credit crunch is quite an important factor IMO.

http://www.lease-hire.co.uk/ are a leasing company I have used alot and always found them to look after me well.

AdrianHi

Some cars are cheaper to lease over 36 months compared to buying and selling on in the same period.
Most Vauxhalls are an example where this works. Leasing companies get big (like 20%+) discounts and pass the savings on in the form a low lease rates.
Private individuals can lease cars, when you see quotes be aware in most cases you will need to multiply by 1.175 to get the VAT inclusive figure you must pay.

For cars which work better as a buy and sell PCP (Personal Contract Plan) may be a better option. You pay a small deposit, relatively low monthly payments and either sell the car back or pay the "balloon" payement (usually slightly under the cars value at 36 months old).
Be aware that for leasing and PCP you really need to know you are going to keep the car for the full term. For PCP early payments are paying interest charges and not reducing the capital owed, there are penalties for getting out of leases early.

Did you have a particular car in mind?

Hintza

Been covered quite a few times. Do a search on "lease" on the main forum page.

I like leasing, vanboy has covered PCP which are different.

Personally I like 12 or 24 month deals....gives you a new car frequently.

Look for the deal and not the car...by that I mean don't decide you want a Golf for example you will be disappointed.

Know when you have a good deal. I reckon monthy payments divided into the cost of the car should be greater than 70 if the approach 100 then it is a good deal. If the figure is below 70 then buying will probably be cheaper.

Go here to start off:- http://www.contracthireandleasing.com/

As vansboy covered and it also holds for a lease:-

Know your annual mileage and the cost per mile for exceeding that.

VAT is normally additional on the quote.
VED is normally part of the deal (which for big cars can make quite a big difference)

The car will have to be returned perfect (factor in a valet my last one cost me £60 plus £150 to get the odd scrape seen to remember even if you didn't do this on a bought car it would still reduce the price when you came to sell.

Look for older models about to be replaced or models coming up for a facelift ther might be a cracking deal.

Look at cars that are not that popular they can also offer good value.

In December you could have got a Dodge Nitro for £150 + VAT!!! Not everyones cup of tea but a great deal.

vansboy

Hintza wrote: »

In December you could have got a Dodge Nitro for £150 + VAT!!! Not everyones cup of tea but a great deal.

& the first examples of this unusual vehicle, are now just showing in auction!

Under £17000 gets you a 9month old 4000mile example.

So if you'd paid list for it new, you'd have parted with £24000 - just showing how a lease/PCP would have saved a nasty surprise, if you'd parted with your own £$£$£$

VB

sarahdee

Thanks, some great advice! I'm quite fond of Vauxhalls and I'm looking for a smaller car so possibly a Corsa would be suitable. I'm eligible for their Partners scheme so would have to do the sums before making decision. I'm not particularly vain but a Dodge Nitro is not quite my style :rotfl:

Hintza

vansboy wrote: »

& the first examples of this unusual vehicle, are now just showing in auction!

Under £17000 gets you a 9month old 4000mile example.

So if you'd paid list for it new, you'd have parted with £24000 - just showing how a lease/PCP would have saved a nasty surprise, if you'd parted with your own £$£$£$

VB

That's the big plus for the lease.

More and more in this day and age I am seeing the car as a liability and not an asset. OK there will be some residual value but if like me you have a 4x4 I certainly don't want to be running any risk with it in the current climate.

PCP certainly cut the risk as well but the big bonus for me is the short leases you can get.

Just another point for the OP the best deals do tend to be on the bigger vehicles and I'm not sure whether a lease is as cost effective on smaller ones. Adrian will probably help more in that department.

vansboy

sarahdee wrote: »

Thanks, some great advice! I'm quite fond of Vauxhalls and I'm looking for a smaller car so possibly a Corsa would be suitable. I'm eligible for their Partners scheme

Then it'll be one of those 'no brainer' decisions (never really understood that term!!)

You'll have an unbeatable deal, on the partners scheme!

& a shiny new Corsa on your drive pretty soon!!

It really wouldn't be worth you looking any other means of financing the purchase!!

Lucky girl!

VB

sarahdee

Not even sure what sort of discount they offer! Quite a substantial one by the tone of your post Vansboy! I'm getting excited now.

:j