[Closed] Talk to me about car leasing...

How long is a piece of string?
Depends what you want and how new it needs to be.

Some great deals are shared on Pistonheads in a thread called best leasing deals.

You can get something small - FIat 500 ish for around £100 per month

There are some amazing deals on cars when the newer model appears - I saw a BMW 335d x drive for £260 per month on 10k miles recently

Have a think how many miles you need the car to run and how much up front you can afford.

Another option is a PCP, after you have paid half the payments you can walk away - I am in year 4 of a 4 year deal and can give them the car back with no penalty.

What sort of car / miles do you want.

PS 2 years seem to be the best deals, it used to be better to go for 4 years to average down the depreciation - not any more!

Talk to me about car leasing...

It lets people who wouldn't otherwise be able to afford a brand new white Audi A4 get their hands on one and then drive around the mean streets of Bradford like d*cks with their mates in the back during the day before their shift at McDonalds starts.

There have been a few threads on this the last few months. Pistonheads is also a wealth of info on leasing deals and things that are good at the moment.

I have a lease car and the monthly expense is a known entity, it includes maintenance so all I have to do is put fuel in it really. The last month it has had 4 new tyres and a new windscreen, all sorted by the lease company with no extra charge to me.

The only thing to be careful of is making sure it's looked after as they will sting you with fees when it's handed back if it gets trashed by kids or dogs.

or it allows normal respectable people to drive a nice £30k car without having to hand over £30K.

instead you hand over about £7k spread out over two years which is roughly the amount the £30k car will have depreciated in that time anyway.

pieces of roundabouts and stringy swings but thats how i look at it.

[i]Having decided that cars are a recurring expense rather than an asset[/i]

Eh, yes...

Unless you want a new/flash car far better to spend enough to get a reliable one - ie £5k.

What sort of car / miles do you want.

I do 12000/year give or take. Some of the BMW deals, for example, are for 10,000 miles/year but at only 5p or so per extra mile that doesn't worry me too much.

Most of my miles are across the Peak District to Lincoln and back or up and down motorways, so looking for a pleasurable car to do decent journeys in rather than a little town car. It will, however, have occasional days taking kids to/from school so 2 seaters are out.

We have a "big car" for family holidays/journeys so doesn't need to be huge.

talking about repair fees - my current deal is about to end so they sent their inspection fella round to check it out the other day with the agreement i can get any defects fixed at my own expense before it goes back! was pretty happy with that! especially with a few mates in the trade...

This could help: http://singletrackmag.com/forum/topic/car-leasing-vs-buying

Unless you want a new/flash car far better to spend enough to get a reliable one - ie £5k.

That's how I used to think and spent approx £8k each time I bought a "new" (to me) second hand car. Whilst I own that car I still have to save for the next car I replace it with, hence thinking that whichever way I look at it - lease or own - I've still got to budget a good deal of money every month to own a car and that's before I put fuel in.

I've not done it but can definitely see the place for them- you will pay more money a month financing a used car, but at the end of it you get to keep it forever. A used car comes with the risk of maintenance, things breaking out of warranty and so on. A lease deal lets you pay less a month for a new car with a full warranty. The total cost per year you keep the car will be higher (if you keep a used car more than 2/3/4 years), which is why I have never gone for one, but it's a known quantity.

WhatCar has a lease deal hunter on their site but Pistonheads is the best place. Small cars like a Fiesta seem to be on deals that are less generous than cars from premium brands like BMW relative to the new cost of the car, where the badge means depreciation is low. Closeout models (for example the 3 series is about to get a revamp) will be on better deals. Mercedes deals are very aggressive - for example a Fiesta can be about £170 a month while an A Class is about £210. Not a lot more money a month for a car that's much more expensive in the first place.

A lot of people are completely against them, mainly for the "buying it outright and running it for longer/buying second hand is cheaper" thing but they do serve a purpose.

Leasing can be a fantastic option- just make sure the lease company is signed upto the BVRLA's terms http://www.bvrla.co.uk/service/fair-wear-and-tear-guides

I didnt get to see the T&C's on my Citroen/PSA manufacturers docs until I'd signed up. It said things like stone chips on the bonnet touched in wouldn't be allowed and you would be charged (at dealers prices) for a respray.

Any car will get stone chips and if you shop in a supermarket..

Leasing is about selling cars to a country that hasn't got enough cash to pay for them outright. It's not a consumer proposition, it's a route to profit for the manufacturers.

I had a mate working at Ford before the 2008 crash and he said their finance division made more profit than the manufacturing division did...

Worth reading this...
[url= http://www.ft.com/cms/s/0/7efdf74a-23f0-11e5-bd83-71cb60e8f08c.html#axzz3h68dhCOr ]Signs of a cloud over Europe's hottest car market[/url]

This quote about dealers self-registering suggests the dealers are getting desperate...

But dealers say, in private, that the market is being pushed too hard by manufacturers — not an unusual refrain but a view shared even among some carmakers.
“The market isn’t quite there for the volumes of vehicles that the car plants are supplying,” says John Leech, head of automotive at professional services firm KPMG.
ASE Global, a data research company tracking statistics from the majority of UK dealerships, says this is prompting a worrying rise in self-registrations — where dealers sell the cars to themselves to make up for private demand that is weaker than the official numbers indicate.

Not just dealers, manufactures have fields full of self registered cars to maintain their places in the league tables. Then get sold on as nearly new.

...it's a route to profit for the manufacturers.

Indeed, whatever you buy at whichever price point it'll almost certainly depreciate and cost you money to maintain. I've run second-hand cars of various ages and costs and they all end up costing money - once you're done with it and add it all up it comes to a couple of hundred a month at least (and some were much worse).

I have a leased car at the moment, I'm very happy with it and the process of acquiring it via a broker was far more pleasant than dealing with car salesmen. I get two years of motoring at a fixed cost. I don't pay the VED and insurance is much lower than an older car of equivalent performance. Once the two years is up I give it back - when that happens I'll probably get another one.

It only works well if you're willing to jump on something that's on offer though. The manufacturers' problems of overproduction, trying to outdo each other on sales numbers, inflated residual value forecasts, etc aren't my problems. If they want to keep on giving me a cheap new car for a set monthly fee and bury their losses in it, they're quite welcome to.

There are some good deals out there especially, on larger cars from premium brands.
Just remember to look at the total cost and not to just a low monthly payment.

Thanks all

I think the summary of the previous leasing threads are that there are 2 types of people.

Those who want a new car and the benefits of a warranty, minimal servicing costs etc. They are happy to pay for this.

Then there are those who prefer to buy a cheaper car that they own, although the initial outlay is lower, there is a risk of higher maintenance bills.

I've been looking into leasing recently having always bought 2nd hand cars (3-4years old) via a loan..

I had a good conversation with a chap from one of the lease companies after spotting the ridiculous offer on 335d M-sports noted above. The tourer I was looking at was around £300 a month with £3000 down over two years with 8k per annum. When compared to walking into a dealer where £300 would probably see you leave with a 318d SE it seemed too good to be true..

The bloke explained that there is a financial institution between the manufacturer and lease company that approach, say BMW, and purchase a 1000 production slots for a particular model, and they in turn deal with lots of individual lease companies. Because they are negotiating on 1000's of units the discount from BMW is big (25-30%) and this saving is able to be passed onto the customer via very competitive monthly rentals.

When I was speaking to the bloke he said there weren't many of the 335d's left but I thought it was just a sales tactic. However when I rang back a couple of days later to order they were gone - I rang a few of the other lease companies and they were also gone demonstrating that they were all coming from the same "batch". If you're willing to be flexible and go for what's on offer there's some incredible deals around. I've seen Golf R's for £260/month.

Because your local dealer (although they are the retail arm of the manufacturer) are no where near these volumes they generally can't compete. However if you really haggle you can get comparable monthly payments on a PCP if the salesman is willing to make a deal.. Downside could be that a PCP is generally 4 years, but if you really like your lease car and you need to give it back after 2 years and find another £3k that could be seen the downside of the lease.

"Once you're done with it and add it all up it comes to a couple of hundred a month at least (and some were much worse)."

We run 2 10 year old french cars for 200quid a month all in tax mot and insurance - the surplus pays for the replacement

They move me and my stuff from a to b when i need - they each do about 10k a year.

If i suddenly had a job that required me to have a car less than 5 years old i would consider a lease.

But since my car doesnt make me money- and the journey to work is cyclable im happy at a known 200quid out going for 2 cars.

If i suddenly had a job that required me to have a car less than 5 years old i would consider a lease.

That's how I look at it. May be getting a car allowance with certain stipulations attached that make the lease / PCP options more attractive - the hassle free element particularly.

Just can't bring myself to do it with my own money, even though I can see some sense - it's not like I can live without it.

The tourer I was looking at was around £300 a month with £3000 down over two years with 8k per annum. When compared to walking into a dealer where £300 would probably see you leave with a 318d SE it seemed too good to be true..

Am I reading this right? You are advocating giving someone almost 10k for 16,000miles usage? 8,000miles a year is nothing. When you got 12k then add up the total cost including any handback adjustments I wonder if man-maths will kick in. I bet after a two-year lease you'd have lost (or spent- however you look at it) close to 12 grand on a car.

Leasing didn't really work for me as I needed permission to take the car to Europe and worried over every single scratch or dent. Thats priceless.

I have never been keen on lease stuff, but....

Our Yaris is on last legs, and we can:
Lease
Skoda Fabia, 24+3 (10k mile p.a.) at £400 down (the Yaris) and £102 per month. = £2800 for two years driving.

Buy 2-3 year old Fabia/Ibiza, @£7k. So deposit of Yaris and repayments £170 a month. = £4080 for two years driving. Out of warranty.

I would prefer to buy, and would get a bigger engine and nicer model. But it would cost a lot, lot more it seems, especially assuming that a thing or two would go wrong with it...

leasing deals online seem to vary widely. Is it generally better going with online deals rather than a dealer option ?

hora - Member

Am I reading this right? You are advocating giving someone almost 10k for 16,000miles usage?

It's more than £10k over 3yrs.

This is where leasing doesn't work for me. I do around 25k miles/yr and when you stick that into the finance calculators, you are looking at around £400+/month for a mid-spec Focus.
Come September, my current car will have cost £69/month in terms of car purchase price/ownership span.

The headline prices always seem to be based around 8-10k miles.

matt_outandabout - Member

I have never been keen on lease stuff, but....

Our Yaris is on last legs, and we can:
Lease
Skoda Fabia, 24+3 (10k mile p.a.) at £400 down (the Yaris) and £102 per month. = £2800 for two years driving.

Buy 2-3 year old Fabia/Ibiza, @£7k. So deposit of Yaris and repayments £170 a month. = £4080 for two years driving. Out of warranty.

I would prefer to buy, and would get a bigger engine and nicer model. But it would cost a lot, lot more it seems, especially assuming that a thing or two would go wrong with it...

But at the end of the loan, the car will be yours. You can keep driving it once the loan is paid off.

My car cost me £7500. It was 3yrs old. Come this September, I will have had it for 9yrs (and put about 245k miles on it). It will have cost me <£70/month in terms of cost of the car.
Of course, on top of this there are running costs that might be included with a lease deal & if you hang onto the car you inevitably end up with repair bills that might be less likely with a new, leased car.
It depends a lot on individual circumstance; a lease car would have cost me more than £400/month due to my mileage. Assuming a lease car at £400/month it would have cost me £43,200 over the same 9 years I've owned this car!

indeed, you end up with (say) a £4k lump on the drive that you can now use for £0 a month in repayments for as long as you like.

i think of it as a bit like a phone - you can buy one upfront or get it on contract; total price over 2 years will be comparable. But if you've bought it then after 2 years you can stop spending 25 quid a month on repayments, and the longer you hang on to it the more you save.

Unfortunately, people get bored after a couple of years and fancy an upgrade...

Of course, on top of this there are running costs

Therein lies the rub. I've bought 3 year old cars and put high mileages on them, but expensive things started going wrong and the car - when I finally decided to get rid - was next to worthless. The monthly cost to run the car AND save for a replacement is not a million miles off the cost of a monthly lease.

I'm sure the facts and figures could be debated endlessly so this is not a question of "should I get a lease?" it's a question of "I've decided to lease a car, tell me what I need to know".

Ta

On a basic level you are spending thousands borrowing someone elses car.

Or to a degree you own your car and you can do whatever you want, when you want and get rid whenever you want.

On a lease car- you sign up for three years. Boy you ARE keeping it for three years, regardless if you lose your job or you circumstances or desires change.

you ARE keeping it for three years, regardless if you lose your job or you circumstances or desires change.

I'm only at early stages of looking at this, as will be getting a car allowance instead of Company car next yr when latter goes back. I had presumed that there are early redemption insurance options if circumstances change ?

Yeah, fair comments. The inescapable commitment is no doubt the biggest black mark on leasing.

What would is the ability to change/escape should we need to.

I asked about this. Nope you are keeping. If you want to return it after say 18months you'd need to pay the remainder in full regardless.

So you could hang onto the car (as you are paying for the lease anyway) - but that means you'd have a car sat in your drive fully insured even if you werent driving it.

So you could return the car- but you'd need to pay the remaining months in full.

I worked with a guy who had a Audi convertible on lease- it was costing him £400 a month, his work situation was precarious and he was upto his mileage allowance. Ontop of this the car needed two new tyres. Expensive ones too. So he was just about scraping by with a car sat at home on his drive.

Everyone says they can afford but imagine two months into a two year lease and your company goes tits up. You are sat doing the maths and you still haven't found a new job. Yet you've got this shiny new car sat outside demanding money every month ontime.

I looked at leasing 2 years ago but they dont seem so cheap when you realise the cheap deals dont include maintenance. And then theres insurance.

I ended up buying a small 800 quid stopgap hatch. Its gone thru 2 mots and cost me just short of 300 in bills including services. 17pm insurance 30pa tax and generally a 30 quid tank of fuel pm. So I'll be keeping this til it dies a death

matt_oab - I believe that with PCPs you can hand the car back if you lose your job, certainly when we were looking at brand new cars a couple of years ago that was the case.

I have done what you have done, twice- we have two Fabias we bought at 6 months and a year old respectively, bought on finance. The payment is more than a PCP on a new car by a chunk but we will keep them until they're as old as your Yaris so in the end it does work out better value.

Everyone says they can afford but imagine two months into a two year lease and your company goes tits up. You are sat doing the maths and you still haven't found a new job. Yet you've got this shiny new car sat outside demanding money every month ontime.

Something's very wrong with your finances if you're not planning for (and able to ride out) that sort of situation.

Ultimately it's about what works for you. I find lots of people don't keep track at all of what their cars cost so really have no idea if something like leasing is better or not for them. They'll spout about their 6 year old Golf that's been great, "cost me nothing", oh except for that cambelt change, and that damper that started leaking, and the electric window motor that failed, and the EGR replacement. Then they trade it in for something else and the excitement of a new car tempers the fact they lost thousands in depreciation too.

Trying to convince people that they're wrong to lease a car just because your grotty old unmaintained Focus hasn't cost you big money (yet) is probably not going to get you that far.

Something's very wrong with your finances if you're not planning for (and able to ride out) that sort of situation.

Lots of people earn a decent wedge but still go close to being overdrawn as they near the next payday.

Its something to do with all the commitments that you have in your life.

Lots of people have multiple direct debits. As soon as the wage stops you are straight into your savings. How much savings do you have?

To go into a lease car then you have to factor in a big enough cushion 'just incase'. Whereas with a car loan you can offload it privately, trade etc at least if the worst comes to the worse.

At somepoint in your life you sink a good chunk of your savings into a house etc- its a question of liquidity.

I've done the lease route once. The car seemed to be a bike-magnet. Whenever I walked closed to the car with the bike (roof rack etc) I'd magically catch something at least once.

How much savings do you have?

[url= https://www.moneyadviceservice.org.uk/en/articles/emergency-savings-how-much-is-enough ]Enough for 3 months essential/committed outgoings[/url] in an instant access account at the very least.

Personally I'm not comfortable without at least 6-9 months of outgoings put aside before I'd start thinking about holidays, bikes or a new kitchen.

Enough for 3 months essential/committed outgoings in an instant access account at the very least.

How mrs_oab and I would love to be able to do that. But every time a few quid gets saved, it is needed (usually a car garage bill) or chosen to spend it (this summers first ever foreign holiday, new sofa's to replace the 15 year old ones we were dreading breaking as they creaked every time you sat on them). Instead, I am pleased that each month I pay all the bills and might have not used any overdraft. 😕

[i]Something's very wrong with your finances if you're not planning for (and able to ride out) that sort of situation.[/i]

When I got laid off, my pal also lost his job (MFI failure). Luckily I got a good package, no debts, high-earning wife and two cars both paid for; he had none of these plus two leased BMW's at £900pcm...

Hard to budget for that.

simon_g - I'm the same but its easy to commit to something etc etc and then suddenly everything changes.

Buying into a product has has no exit clause for years is a bigger commitment- dare say bigger than buying/having to sell a house. The scale of £ may be different but one you can get out of if need be in a reasonable amount of time.

do these deals not have exit clauses ?

Typically early exit charges are very high so effectively no, it's yours for the term.

Leases over 2 years aren't so appealing to me for that reason.

interesting, thanks. My Company car scheme is changing over to an annual allowance, so I had been thinking of a nice something on a 3 or 4 yr pcp/lease type deal next year when current car goes back.... not so sure now if I am going to be fully tied into it regardless of major circumstance changes...