View Full Version : Leasing a car?
18th Jul 2012, 10:47
After a few years of driving around in bangers, I was thinking of persuading my wife to allow me to purchase a decent car. Not wishing two lose a third of the car's value driving off the forecourt I was wondering whether it makes any sense to lease a vehicle for 3 years thereby getting the pleasure of a new car without the worries of depreciation. I'd be doing about 12,000 miles a year.
Friends, Romans and countrymen, your thoughts or anecdotes please.
18th Jul 2012, 10:52
You say your location is EU, but where exactly? Leasing deals vary greatly by country.
Here for example, the Super-U supermarket chain leases Fiat Pandas for 5 euros per day, based on a two year contract. The price includes full insurance and all servicing.
18th Jul 2012, 11:05
If you are in the UK, you have to be a company to lease a car, individuals have to do contract-rent. Difference is in the tax treatment of the costs.
Do the sums and see if you think the cost is worth it in enhanced feelings.
I personally prefer to buy a five-year old car ( Ford Mondeo 1.8 £ 1,900 ) and drive it for another 5 years. I have confidence that the mechanics are not likely to let me down significantly if I check the car as well as I can and all the work that the Ford/GM engineers put into the development pays off.
This car may however be the banger you are talking about, in which case I haven't helped much.
18th Jul 2012, 11:12
Mike, you don't avoid depreciation by leasing, it is factored in to the lease payments, as are the costs of providing you with the finance and provision of a margin. So ordinarily, unless there is a deal heavily subsidised by the manuafaturer to move metal, the costs will be higher than buying. That said leasing does give the comfort of a known expense, providing the contract is adhered to.
The last 3 cars I have bought, the 3 previous were leased. If leasing was less expensive I would still be leasing.
18th Jul 2012, 12:25
That Panda deal is amazing.:ok:
18th Jul 2012, 12:35
Used to be something in UK called 'Guaranteed Re-Purchase', you took delivery of a new car, they guaranteed to re-purchase at not less than an agreed price, good for deals of three months or more.
18th Jul 2012, 12:44
That Panda deal is amazing.http://images.ibsrv.net/ibsrv/res/src:www.pprune.org/get/images/smilies/thumbs.gif
Is it? At today's exchange rate, that works out at about £4, £120 per month, £1440 per year, or £7200 over five years. Dealer rates for a brand new 1.2 pop Panda roughly £7-£7500.
It's roughly on a par with what you could get with a little hard nosed haggling, the big difference being you would own the car & therefore offset a degree of the outlay with residual sale value.
Generally speaking, there is no such thing as a bargain.
18th Jul 2012, 13:04
Now add the insurance and the servicing costs to your sums - included in the deal mentioned by leftleg.
Being a panda already, maybe I'm biased.
18th Jul 2012, 13:06
Leasing companies make a profit.I rest my case.
18th Jul 2012, 14:25
One of the ways to avoid some of the depreciation is to buy an ex-demonstrator or a one year old beast.
A A Gruntpuddock
18th Jul 2012, 14:45
Having bought a new car which I was not too happy with (and realising just how much I lost by driving it away from the dealer) I now usually look for a clean, one owner 3 year old car.
These are binned by people who do not want the hassle of MOT tests but you usually get a 1 year warranty with them and a nice, shiny new MOT certificate (if you buy from a dealer).
I bought my first one this way from a colleague at work who sold it for the offered trade-in value then got a discount for no trade-in!
Did over 70,000 miles with far fewer problems than I had with the new car in less than half the mileage.
Both front wheel bearings went on my present car bought from a large dealer but they were replaced under the 1 year warranty - Y registered, bought at 3 years old and I'm still using it.
Leasing a car is usually the best way to go,as long as you keep within the terms of the lease,mileage,condition etc.I always go for max 24 months,smallest/no deposit and don't start specing up the car away from the special deal thats on offer.
Remember leasing co's will buy the car far cheaper than an ordinary punter and they take all the depreciation risks.
Works best for people that don't get emotional about cars.
18th Jul 2012, 15:15
Generally speaking these deals are aimed at putting a car people couldn't normally afford on their driveway. Someone has to be paying for that and its the end user.
Essentially I look at them as a rental. Because the figures are so tight to keep the rentals down there are harsh penalties for going over the mileage limits. Normally they advertise the rentals based on a low annual mileage. You often find you need to get rid before the end of the term because the mileage is getting high and then you find you're in negative equity with the settlement because the effect of paying low monthly rentals is not paying off much of the cost.
Also for high end marques if servicing is not included that's a big additional hit in the pocket, you have to keep them serviced, its in the ts and cs.
I think the advice so far is the best, a 2-3 yr old car bought outright is the best option. Unfortunately I don't have even that much cash, so I'm on the 8 yr old car bought outright and a spanner and overalls at the weekend to keep maint costs down.
Having said that, with some imagination you can get some quite interesting metal for £1500-£2000.
Sir George Cayley
18th Jul 2012, 17:28
Get a classic car. Before 1971 no road tax and loads of fun. Also you can maintain it yourself and insurance is cheap.
There are loads of restoration companies which keeps prices down and choice wide.
Having said that I'm on a deal whereby I pay £150 p/m for 4 years with free servicing, free recovery and a number of choices at the end- one of which is to swap into a new one.
In a way it's just like a rental agreement where you never own the car and get a new one on a regular basis.
I commend it to the House.