Financially best way to buy a car?
Discussion
NoelWatson said:
daemon said:
NoelWatson said:
Agent Orange said:
NoelWatson said:
Yes, looked through those, but am looking for some proper analysis rather than some salesman BS posted by a car leasing company that seems plausible on initial viewing but doesn't hold up to rigorous analysis. Where do I find that?
My understanding is it this. You need to look at the total cost of ownership of a car not just the initial purchase price.Simplistically with property the maintenance you spend on it will pay dividends in future years as the value of that property rises. Of course this is only relevant when you sell it.
With a car, a bar a very few exceptions ie. collectibles, any money spent on maintenance will be lost in the resale value that will be less than your purchase price and significantly less that the purchase price plus the maintenance costs.
You bought the car for £20K but that's not its cost to you that is just the initial purchase price. To keep that car working requires additional expenditure. Add in servicing, repair bills, tax, tyres, petrol etc. etc. etc. over the period of ownership and divide by the number of months. That is how much that car costs you a month to own.
If like me you use your car drive up and down the motorway each day sticking miles on it the re-sale is likely to be lower than the old retired guy who bought the identical car and potters to the shops occasionally.
I may have got a stunning deal on my car when I bought it. The old man might have paid full sticker price for his. Doesn't matter much because although I got £2K off my purchase price his car is worth £3K more than mine.
In which case my understanding is I should never buy the cars I have given how I use them. I'd be better off putting some of the cash I intended to spend on a car towards a lease deal and paying the monthly amount smoothing out and fixing my costs over the "ownership" of the vehicle.
I could then use remainder of the cash I'd intended to buy the vehicle with to offset the mortgage further.
Someone tell me if I'm wildly out here because I've either just had an epiphany or I'm considering financial suicide...
You are either genuinely retarded or being deliberately obtuse.
Either way, just asking for the same information over and over again is making you look like a fool.
daemon said:
Deva Link said:
TVR1 has a thread going wondering how much he can screw out of people on a car he got cheap but doesn't need now (masterful purchasing decision 
).
Can you point me to that? ).Deva, you really are a numpty. My thread was a considered question about what a particular car was worth privately. I explained my situation clearly and was quite happy to sell for less because I paid less. Sorry about that, I guess you missed the point again?.
You see, even though I have been in the motor trade for a while, I still ask questions when I am unfamiliar with a particular car/brand, especially when there is a limited supply of them to choose from and to judge sensible pricing.
The other poster on that thread pointed me in the direction of a couple of cars I had missed, mainly because I was concentrating on private sales but he still added something constructive. As a result of that, I have reviewed my pricing thoughts but not by too much....I shall wait until the first flurries of snow down South and see what happens then.
You may also notice that I didn't bother responding after your second post, when you popped up on the thread? Simply because you could add nothing.
HTH
here it is...
http://www.pistonheads.co.uk/gassing/topic.asp?h=0...
NoelWatson said:
daemon said:
NoelWatson said:
daemon said:
NoelWatson said:
daemon said:
Heres another example. First one i found.
Renault Clio 1.2 16v 75 Dynamique TomTom. List price £12900. What Car? target price £10594. Retained value @ 3 years £3813.84 (36%).
Lets say you were able to get What Cars target price - If you were to pay with cash then driving the car for three years would cost you £6780 (10594 - 3813)
If you were however, to avail of Renaults PCP finance deal for the same car, which is £199 deposit and £199 for 36 months and handed the car back, then in total you would have spent £7363. If you were to have invested your £10594 in a 2.99% savings account (http://www.moneysavingexpert.com/savings/savings-accounts-best-interest#nationwide) then over the 3 years your £10594 would be worth £11572.
Therefore by keeping your money in a savings account and using the PCP deal you would be £395 better off AND
(a) your savings would be in the bank should you need them - no bad thing in a recession.
(b) if depreciation increased you are protected
(c) you have the cash in the bank should you need to clear the loan at any time.
Granted, there are potential variables in there that may fall in favour of either argument BUT it certainly shows that using finance may not necessarily cost you more than using cash.
Do you have to take into accountRenault Clio 1.2 16v 75 Dynamique TomTom. List price £12900. What Car? target price £10594. Retained value @ 3 years £3813.84 (36%).
Lets say you were able to get What Cars target price - If you were to pay with cash then driving the car for three years would cost you £6780 (10594 - 3813)
If you were however, to avail of Renaults PCP finance deal for the same car, which is £199 deposit and £199 for 36 months and handed the car back, then in total you would have spent £7363. If you were to have invested your £10594 in a 2.99% savings account (http://www.moneysavingexpert.com/savings/savings-accounts-best-interest#nationwide) then over the 3 years your £10594 would be worth £11572.
Therefore by keeping your money in a savings account and using the PCP deal you would be £395 better off AND
(a) your savings would be in the bank should you need them - no bad thing in a recession.
(b) if depreciation increased you are protected
(c) you have the cash in the bank should you need to clear the loan at any time.
Granted, there are potential variables in there that may fall in favour of either argument BUT it certainly shows that using finance may not necessarily cost you more than using cash.
Edited by daemon on Wednesday 24th November 08:19
Edited by daemon on Wednesday 24th November 08:20
1. Tax on interest
2. Acceptance fee £99
3. Credit facility fee £139
and if you do PCP how many miles per year is this based on, compared with the retained value estimate?
The credit facility fee is only payable if you buy the car outright at the end of the term.
Irrespective, the cash buyer is not necessarily wildly better off, as has been implied by some other posters.
All i'm saying is that anyone buying a car needs to think outside of the box. A very simple example is that the 'cash is king' brigade are advocating buying a new focus titanium with cash. They think that is the best way to get the best deal. Personally, i wouldnt. I would buy one at 6 months to a year old at around £10K ish. I would also not buy the titanium spec, as its the Zetec spec thats favoured on the used car market. So instead of just banging the 'buy a new focus with cash' drum, if you take a step back, there are considerably more cost effective ways to get one instead.
Another example - and one that i was ribbing RobSTI about - there was a guy over on the BMW forum was looking at a £39,000 325i Cabriolet. there was initially some debate around 'cash is best' and getting a better 'cash deal', however there were those among us who pointed out that the 325i was not favoured on the used market, and that the O/P could have been looking at a £25,000 lost in three years. Hes now looking for a 330i / 335i which we expect him to be able to buy for the same price if hes canny.
There was another guy on another forum who gave £25,000 for a Peugeot 308 but because he bought it for cash, he though he'd got a great deal.
So basically instead of blindly saying 'always buy cash'
(a) do your homework on the right car, the right model of car, the right engine size, the fuel consumption, the insurance group, the tax band and the residual values.
(b) look out for any manufacturer backed finance deals - such as 0% finance, low rate finance or finance contributions by the manufacturer.
(c) Use online brokers who supply UK cars and then beat your local dealer up with that price until he price matches - if he doesnt, use the broker.
(d) If its a mass market car, consider buying at six months old instead of new.
(e) Play national dealers off local dealers - ie, dont be afraid to travel to get the best deal - you'd be surprised how prices vary between dealers for the same car.
(f) If you're thinking of using cash, make sure your money cant be working harder for you elsewhere.
(g) If you're thinking of using finance, use the online money comparison sites to find the best deal - then ask your dealer to price match.
(h) Consider using a 0% credit card for some or all of the amount
(i) If you're considering a diesel, are you doing the mileage to justify it? Often the petrol variant costs a lot less and is more heavily discounted too.
I would guarantee that using the above will save far more money than just walking in to a dealers and saying 'whats your best price for cash', which sadly, so many people blindly do.
Edited by daemon on Wednesday 24th November 09:04
Edited by daemon on Wednesday 24th November 09:06
We are talking about this car
http://www.whatcar.com/car-reviews/renault/clio-ha...
1. Cash
Buy the car with cash for £10310 (checked drivethedeal) and sell for £4600 (unless I have got wrong car/page) - I assume this is for 12k miles pa
http://www.whatcar.com/car-depreciation-calculator...
costing £5700
2. Credit
Taken from here
http://www.renault.co.uk/cars/model/new-clio/offer...
37*£199 = £7363 + £99 fee = £7462
Then add the extra 6000 miles a year over the 6k pa limit @6p/mile = £1080
= £8542
Subtract the interest from this. Starting with £10310 and ending with £2828 (you would be paying for the car monthly out fof your bank balance), so average of ~£6500, giving ~£600 interest over the 3 years.
Finance therefore costing ~£7900
(a) that the person doing the PCP deal cant get the same deal from drivethedeal and get a PCP deal anyway
(b) that the person is doing 12K per year
(c) that the person, even if they are doing 12K per year, isnt going to exercise their rights to a voluntary termination ahead of the end of the PCP deal.
Again, (and again), all i am saying is there are many factors influencing total cost of ownership that far surpass the method of purchase. I still think its interesting that some of the 'cash is king' brigade are that focussed on proving their point, that they've missed the fact that the O/P thanked me (and others) for pointing out that they can save £5K by buying a nearly new one instead.
How much money have your contributions on this thread saved the O/P?
daemon said:
(a) that the person doing the PCP deal cant get the same deal from drivethedeal and get a PCP deal anyway
I thought we were talking about a PCP deal with Renault?daemon said:
(b) that the person is doing 12K per year
If we are going to do a fair comparision, I don't see another optiondaemon said:
How much money have your contributions on this thread saved the O/P?
I'm focussing on cash vs. finance - I don't dispute new vs. nearly new. I also didn't realise that the OP had gone ahead and done the deal based on your advice - in which case the debate is no longer relevant for this particular case!daemon said:
TheCoolerKing said:
This argument could run and run, but a very good positive has come out of all this, oh yes.
It is clear that buyers are far more likely than I intially thought to question the options provided by car dealers.
Its very sad when people blindly say 'where do I sign' instead of 'explain how I'm better off with pcp again', followed by 'cut the bullsh*t and hand me a calculator'.
Actually i dont read it like that - i think the people who buy with cash simply dont look at the other options. That certainly comes across when you see how little grip the likes of RobSti and Deva Link on simple finance concepts and the high level overviews of how a car manufacturer operates.It is clear that buyers are far more likely than I intially thought to question the options provided by car dealers.
Its very sad when people blindly say 'where do I sign' instead of 'explain how I'm better off with pcp again', followed by 'cut the bullsh*t and hand me a calculator'.
I think the conversations go something like this 'whats your best price for cash', '(yawn), we'll knock £100 off the £30K sticker price', 'ok well cash is king so thats fine i'll take it' OR 'whats your best price for cash', 'Sir, we're doing 0% finance over 4 years on this car', 'no, no, no, no, no young man, cash is king'....
What's your best price for cash, no, no, no, no. Do customers actually say this, we have much to teach them.
daemon said:
Shnozz said:
Dr Jekyll said:
daemon said:
As someone else has said - isnt it amazing how many internet millionaires there are on pistonheads who only ever buy with cash?
Some of us buy with cash because we can't afford finance.I'm sure the flexibility of finance is of use to people in certain situations. Tax offsetting, co car allowance, own business, short term need etc etc. There does seem to be a real divide amongst people that breeds strong contempt.
One thing I regularly read that does raise my eyebrows is the amount of folk that argue they have a better use for the money or can get a better return. Of every person I know with a car on finance, I would say not one of them have the equivalent cash balance in liquid assets and, at the very least, may have illiquid assets such as equity in a house that might cover the balance. It seems a protection mechanism or a counter argument to those who chose finance to suggest it was a choice rather than a necessity. All good in theory but in practice, I would be very surprised if most folk signing up to these deals could have simply paid by debit.
Also, I am the biggest advocate of financing / leasing and i dont have a car on finance, so that blow your theory out of the water doesnt it?
I have no prejudice against finance. It works for some and certainly shouldn't be discounted if your circumstances fit. As Fox- stated earlier, however, the reality is that the vast majority finance because they can't afford to pay cash in a lump sum. They could compromise and buy a cheaper car, but they simply don't want to. If they can afford the finance, and are prepared to make the compromises of the equity repayment and the additional costs of servicing debt, then good for them. If the added feel good factor of that more expensive, often nicer car is a greater benefit when contrasted with the compromises, then it's made them happy with no detriment. To others, it wouldn't be worth it.
I simply fail to accept that the vast majority of those financing a car do so with the equivalent cash sum available. That is my experience. Indeed, you gave an example in your case of using the cash elsewhere and finance against the car. An example of where finance can be used to one's advantage. In my world, if £20k was being used to pay for building work I would have weighed up buying a car for £1,000 and saving another £20k for a new car, rather than finance it. Simply using the £20k for building work wouldn't mean that I still had £20k to use on a car. The £20k was extinguished, for a good use. The cash balance returns to zero and one makes the decision to either borrow against a car, save, or reduce your sights.
FWIW, I would explore all options when buying a new car. I think that to not do so would be naive. I also aspire to cars that I cannot afford to buy for cash, like many of us petrolheads. As a result, I would often expect those on PH to be willing to compromise elsewhere, whether using cash or finance, to drive something decent.
Shnozz said:
FWIW, I would explore all options when buying a new car. I think that to not do so would be naive. I also aspire to cars that I cannot afford to buy for cash, like many of us petrolheads. As a result, I would often expect those on PH to be willing to compromise elsewhere, whether using cash or finance, to drive something decent.
Well on that, you and i are singing from the same hymnsheet as it were - that is all i have been trying to say.Also, i've never said that the bulk of people who use finance do so because they otherwise have the cash but are too canny to use it. All i've said that sometimes there are deals out there that can be exploited and that do stack up very well against the option of using your own hard earned.
Could those who still dont grasp that concept and feel an urge to ask further dumb asked questions, could you re-read the above paragraphs until the penny drops.
If you still arent getting it, ask a grown up to help.
Edited by daemon on Friday 26th November 11:35
Edited by daemon on Friday 26th November 11:38
NoelWatson said:
Agent Orange said:
NoelWatson said:
Yes, looked through those, but am looking for some proper analysis rather than some salesman BS posted by a car leasing company that seems plausible on initial viewing but doesn't hold up to rigorous analysis. Where do I find that?
My understanding is it this. You need to look at the total cost of ownership of a car not just the initial purchase price.Simplistically with property the maintenance you spend on it will pay dividends in future years as the value of that property rises. Of course this is only relevant when you sell it.
With a car, a bar a very few exceptions ie. collectibles, any money spent on maintenance will be lost in the resale value that will be less than your purchase price and significantly less that the purchase price plus the maintenance costs.
You bought the car for £20K but that's not its cost to you that is just the initial purchase price. To keep that car working requires additional expenditure. Add in servicing, repair bills, tax, tyres, petrol etc. etc. etc. over the period of ownership and divide by the number of months. That is how much that car costs you a month to own.
If like me you use your car drive up and down the motorway each day sticking miles on it the re-sale is likely to be lower than the old retired guy who bought the identical car and potters to the shops occasionally.
I may have got a stunning deal on my car when I bought it. The old man might have paid full sticker price for his. Doesn't matter much because although I got £2K off my purchase price his car is worth £3K more than mine.
In which case my understanding is I should never buy the cars I have given how I use them. I'd be better off putting some of the cash I intended to spend on a car towards a lease deal and paying the monthly amount smoothing out and fixing my costs over the "ownership" of the vehicle.
I could then use remainder of the cash I'd intended to buy the vehicle with to offset the mortgage further.
Someone tell me if I'm wildly out here because I've either just had an epiphany or I'm considering financial suicide...
Have a look at the CLK deal I posted earlier, that's an example of finance being better than cash. I reckon as a rough estimate I have saved £2500 over 2 years by doing PCP rather than buying.
In 2004 I bought a brand new BMW 318Ci for cash, in two years of ownership I lost £8750 in depreciation, or 40% of value. It took me 3 months to sell it with no interest at all, eventually selling back to a dealer for £13250.
After that I had an A4 cabrio, which I had on personal lease from 07 to 09. I paid £7930 in payments over 2 years. The list price was £28,500 which there was no scope for shifting from, 2 years later I could have bought it at the end of the lease for £13,750 (and in hindsight really wish I had!). It was later advertised at a main dealer for £19,000. If I bought cash I reckon I may have lost £10k on it in that period, £2k/ 20% more than the lease payments.
In my mind finance is not always better than cash, conversely cash is not always better than finance. I have no link with the motor trade so no vested interest.
(by the way, the £13250 from the sale of the BMW was used as a vital part of investment in starting a commercial property portfolio, my share of which is now £180,000 equity in 4 years - the cash is working very well elsewhere)
It seems we have a few people here who have convinced themselves that leasing is best and keep trotting out extreme examples to illustrate the point.
Sometimes a manufacturer will put together a stonking deal to generate future used cars or similar. This means you get amazing deals like the Clio one, or the £400 a month 635d's we had a few months back.
Normally, it is not like this. Leasing is simple.
Lease cost = Price paid for car by lease company minus the expected residual value of the car plus profit for the lease company.
You dont avoid depreciation by leasing, you simply pay somebody elses depreciation bill (and some profit margin for them) for a car you don't own.
Sometimes it works out cheaper, most of the time it doesnt, usually the benefit of a lease is convenience or ability to own a newer more valuable car than you could afford to buy. Rarely is it more financial prudent unless we get into the world of business leasing.
Sometimes a manufacturer will put together a stonking deal to generate future used cars or similar. This means you get amazing deals like the Clio one, or the £400 a month 635d's we had a few months back.
Normally, it is not like this. Leasing is simple.
Lease cost = Price paid for car by lease company minus the expected residual value of the car plus profit for the lease company.
You dont avoid depreciation by leasing, you simply pay somebody elses depreciation bill (and some profit margin for them) for a car you don't own.
Sometimes it works out cheaper, most of the time it doesnt, usually the benefit of a lease is convenience or ability to own a newer more valuable car than you could afford to buy. Rarely is it more financial prudent unless we get into the world of business leasing.
Fox- said:
It seems we have a few people here who have convinced themselves that leasing is best and keep trotting out extreme examples to illustrate the point.
Can you show me where anyone has said leasing is always best?Fox- said:
Sometimes a manufacturer will put together a stonking deal to generate future used cars or similar. This means you get amazing deals like the Clio one, or the £400 a month 635d's we had a few months back.
Yup. Though Renault run deals like this all the time, as do a lot of manufacturers.Fox- said:
Lease cost = (Heavily Discounted)Price paid for car by lease company minus the expected residual value of the car (which they are in a better position to get than we are) plus profit for the lease company.
You dont avoid depreciation by leasing, you simply pay somebody elses depreciation bill (which is going to be less as they paid less for the car)(and some profit margin for them) for a car you don't own.
Sometimes it works out cheaper, most of the time it doesnt, usually the benefit of a lease is convenience or ability to own a newer more valuable car than you could afford to buy. Rarely is it more financial prudent unless we get into the world of business leasing.You dont avoid depreciation by leasing, you simply pay somebody elses depreciation bill (which is going to be less as they paid less for the car)(and some profit margin for them) for a car you don't own.
You're right, a lot of the time it wont suit the individual, a lot of the time it isnt cheaper, but sometimes its a peach of a deal.
Again, and for the record, i dont currently have a car on finance and i dont currently have a car leased, however i can accept that there are times than either might work better than cash.
Edited by daemon on Friday 26th November 13:48
Fox- said:
It seems we have a few people here who have convinced themselves that leasing is best and keep trotting out extreme examples to illustrate the point.
Sometimes a manufacturer will put together a stonking deal to generate future used cars or similar. This means you get amazing deals like the Clio one, or the £400 a month 635d's we had a few months back.
Normally, it is not like this. Leasing is simple.
Lease cost = Price paid for car by lease company minus the expected residual value of the car plus profit for the lease company.
You dont avoid depreciation by leasing, you simply pay somebody elses depreciation bill (and some profit margin for them) for a car you don't own.
Sometimes it works out cheaper, most of the time it doesnt, usually the benefit of a lease is convenience or ability to own a newer more valuable car than you could afford to buy. Rarely is it more financial prudent unless we get into the world of business leasing.
At last someone with sensible comments. yipeeSometimes a manufacturer will put together a stonking deal to generate future used cars or similar. This means you get amazing deals like the Clio one, or the £400 a month 635d's we had a few months back.
Normally, it is not like this. Leasing is simple.
Lease cost = Price paid for car by lease company minus the expected residual value of the car plus profit for the lease company.
You dont avoid depreciation by leasing, you simply pay somebody elses depreciation bill (and some profit margin for them) for a car you don't own.
Sometimes it works out cheaper, most of the time it doesnt, usually the benefit of a lease is convenience or ability to own a newer more valuable car than you could afford to buy. Rarely is it more financial prudent unless we get into the world of business leasing.
Well done Mr. Fox, very well put.
Clear, concise, acurate and objective.
Finally
To quote you again 'You dont avoid depreciation by leasing, you simply pay somebody elses depreciation bill (and some profit margin for them) for a car you don't own.'
We are not saying cash is king, just please understand the above sentence make it your mantra.
Edited by TheCoolerKing on Friday 26th November 13:46
TheCoolerKing said:
Fox- said:
It seems we have a few people here who have convinced themselves that leasing is best and keep trotting out extreme examples to illustrate the point.
Sometimes a manufacturer will put together a stonking deal to generate future used cars or similar. This means you get amazing deals like the Clio one, or the £400 a month 635d's we had a few months back.
Normally, it is not like this. Leasing is simple.
Lease cost = Price paid for car by lease company minus the expected residual value of the car plus profit for the lease company.
You dont avoid depreciation by leasing, you simply pay somebody elses depreciation bill (and some profit margin for them) for a car you don't own.
Sometimes it works out cheaper, most of the time it doesnt, usually the benefit of a lease is convenience or ability to own a newer more valuable car than you could afford to buy. Rarely is it more financial prudent unless we get into the world of business leasing.
At last someone with sensible comments. yipeeSometimes a manufacturer will put together a stonking deal to generate future used cars or similar. This means you get amazing deals like the Clio one, or the £400 a month 635d's we had a few months back.
Normally, it is not like this. Leasing is simple.
Lease cost = Price paid for car by lease company minus the expected residual value of the car plus profit for the lease company.
You dont avoid depreciation by leasing, you simply pay somebody elses depreciation bill (and some profit margin for them) for a car you don't own.
Sometimes it works out cheaper, most of the time it doesnt, usually the benefit of a lease is convenience or ability to own a newer more valuable car than you could afford to buy. Rarely is it more financial prudent unless we get into the world of business leasing.
Well done Mr. Fox, very well put.
Clear, concise, acurate and objective.
Finally
To quote you again 'You dont avoid depreciation by leasing, you simply pay somebody elses depreciation bill (and some profit margin for them) for a car you don't own.'
We are not saying cash is king, just please understand the above sentence make it your mantra.
Edited by TheCoolerKing on Friday 26th November 13:46
If a lease company get a 40% discount on a Focus, and take a 10% profit, then thats still going to work out better for you or i than a 20% discount that you or i could achieve?
Edited by daemon on Friday 26th November 13:51
daemon said:
I dont think anyone has said anything other than 'check out ALL the options', something the Cash is King brigade can't get their head around.
You're right, a lot of the time it wont suit the individual, a lot of the time it isnt cheaper, but sometimes its a peach of a deal.
Exactly!!You're right, a lot of the time it wont suit the individual, a lot of the time it isnt cheaper, but sometimes its a peach of a deal.
So, in summary, look at all the options. Don't dismiss PCP/ lease/ finance out of hand as being inferior to cash as if you shop around it may get you a better deal. Not always, but maybe.
soxboy said:
daemon said:
I dont think anyone has said anything other than 'check out ALL the options', something the Cash is King brigade can't get their head around.
You're right, a lot of the time it wont suit the individual, a lot of the time it isnt cheaper, but sometimes its a peach of a deal.
Exactly!!You're right, a lot of the time it wont suit the individual, a lot of the time it isnt cheaper, but sometimes its a peach of a deal.
So, in summary, look at all the options. Don't dismiss PCP/ lease/ finance out of hand as being inferior to cash as if you shop around it may get you a better deal. Not always, but maybe.
Can we have agreement from the 'Cash is King' brigade on SoxBoys statement?
Edited by daemon on Friday 26th November 13:53
daemon said:
Would you not agree though that the leasing company will get a vastly higher discount than you or I, therefore can on occasions offer a better overall leasing deal to cover depreciation than you or i could hope to achieve with cash?
There will be discounts, but you are not going to be getting 40% discounts on cars as a lease company. Many lease companies order the cars through UK dealers not direct from the manufacturer and whilst there will be discounts, 40% is ridiculous.They are not in a better position to get money back at resale either - most of the ex-lease stuff is disposed of through auction, where you, me or the car trade can go and buy on them.
A private individual has the chance to sell the car privately and get more money than this back.
Edited by Fox- on Friday 26th November 14:00
Fox- said:
daemon said:
Would you not agree though that the leasing company will get a vastly higher discount than you or I, therefore can on occasions offer a better overall leasing deal to cover depreciation than you or i could hope to achieve with cash?
There will be discounts, but you are not going to be getting 40% discounts on cars as a lease company. Many lease companies order the cars through UK dealers not direct from the manufacturer and whilst there will be discounts, 40% is ridiculous.They are not in a better position to get money back at resale either - most of the ex-lease stuff is disposed of through auction, where you, me or the car trade can go and buy on them.
A private individual has the chance to sell the car privately and get more money than this back.
Edited by Fox- on Friday 26th November 14:00
Fox- said:
daemon said:
Would you not agree though that the leasing company will get a vastly higher discount than you or I, therefore can on occasions offer a better overall leasing deal to cover depreciation than you or i could hope to achieve with cash?
There will be discounts, but you are not going to be getting 40% discounts on cars as a lease company. Many lease companies order the cars through UK dealers not direct from the manufacturer and whilst there will be discounts, 40% is ridiculous.They are not in a better position to get money back at resale either - most of the ex-lease stuff is disposed of through auction, where you, me or the car trade can go and buy on them.
A private individual has the chance to sell the car privately and get more money than this back.
Edited by Fox- on Friday 26th November 14:00
Edited by daemon on Friday 26th November 14:16
TheCoolerKing said:
Fox- said:
daemon said:
Would you not agree though that the leasing company will get a vastly higher discount than you or I, therefore can on occasions offer a better overall leasing deal to cover depreciation than you or i could hope to achieve with cash?
There will be discounts, but you are not going to be getting 40% discounts on cars as a lease company. Many lease companies order the cars through UK dealers not direct from the manufacturer and whilst there will be discounts, 40% is ridiculous.They are not in a better position to get money back at resale either - most of the ex-lease stuff is disposed of through auction, where you, me or the car trade can go and buy on them.
A private individual has the chance to sell the car privately and get more money than this back.
Edited by Fox- on Friday 26th November 14:00
daemon said:
Fleet sales and hire car companies get 40% off list on something like a focus, why wouldnt a large leasing company?
List price on a Focus is a meaningless figure, anyone can get substantial discounts on a Focus list price, even Mr Joe. A lease company wont be paying 40% less than the lowest price Mr Cash Buyer would acheive through some haggling, irrespective of what the list price is.Hire companies often have specific deals tied to the return of the car to the manufacturer at a certain age and mileage to be put into the approved used scheme, etc etc.
Take a BMW 5 Series at £29k for a 520d. You think a leasing company is buying those for under £20k do you? Seriously? You honestly think that? They are simply ordering them through local dealers like everyone else - with a bit more discount but not enough discount that the leasing cost over 3 years will be less than the depreciation cost over 3 years on a properly haggled private deal.
Edited by Fox- on Friday 26th November 14:27
Gassing Station | General Gassing | Top of Page | What's New | My Stuff