To lease or not?

[barrieeld]

Pondering...my 635d has gone and had my head set on leasing a car..spending 1-2k on a deposit and keeping the rest of my money to put into a buy to let or another business.

Makes sense to me ...but then an overfinch tdv8 gt tempted me....was high on the miles 120k (2006) @ £20k but its condition was immpeccable...owned by a real piston head with huge car collection.

So then I was about to drop my 20k into this when a friend of mine from MB corporate contacted me about an SL350 offer that was simply unreal...

Basically the SL now comes with the amg sport pack as standard and MB needed to shift around 30 surpluss cars which didn't have this...the lease deals were very good and they all went within 30mins but I had a hold on one car black with a ton of options..what was the offer...£275+ VAT for a 70k car! Now I'm swayed and ready to sign the line even though its a bit impractical for my proposes.

Dilemma..what to do? I know leasing is a guaranteed way to loose money (I always managed to sell my cars either breaking even or making a profit) but selling used cars is getting much tougher now and quite fancy the idea of a new car for a change....

[Chas88]

For that car at that price I'd lease, no question.

[TVR1]

Mercedes? Nothing surprises me.

I'm doing £296 p /month on a 24 months 0% PCP deal for a £47k car.

£12k deposit though.

7 seater 4x4 my end.


If you can put it through your company, You can write off the monthlies too, imissions dependant.

Watch out for BiK though.

[barrieeld]

@Chas88 yes that's what I'm thinking..have to decide tomorrow.

The car comes with a ton of options too and it's on a 6-23 deal instead of the 9-23

[barrieeld]

@TVR1 BIK would be insane for the SL which is why I never considered putting it through my Co.

I've always personally leased and claimed milage as is much cleaner than having a car on the balance sheet, plus the most VAT you can claim back is 50% unless its an ecomobile.

I wouldn't normally lease but for something as pricey as the SL I'm sure the payments wouldn't even cover a years depreciation on that car...I wouldn't never buy one new

[CB125T]

I honestly see no reason not to..

[barrieeld]

anyone driving an R321 SL350 just now? Any good?

[barrieeld]

the MB one doesn't seem too unreasonable

acceptable is stone chips, windscreen chips all the usual wear and tear you would expect.

Who did you lease with?

[funkyrobot]

barrieeld said:

@Chas88 yes that's what I'm thinking..have to decide tomorrow.

The car comes with a ton of options too and it's on a 6-23 deal instead of the 9-23

Sorry if this sounds like a stupid question, but what does 6-23 mean? Is it 6 month's worth of money upfront, then 23 payments? Thanks.

[Hackney]

funkyrobot said:

Sorry if this sounds like a stupid question, but what does 6-23 mean? Is it 6 month's worth of money upfront, then 23 payments? Thanks.

Yes

[barrieeld]

[gizlaroc]

If you fancy being an SL for 2 years then go for it.

Although you will get those that will come on in a minute and say "I paid cash for mine, I'm not falling for that finance trap."
And then go on to loose £35,000 over the next 2 years in depreciation.

[funkyrobot]

Hackney said:

funkyrobot said:

Sorry if this sounds like a stupid question, but what does 6-23 mean? Is it 6 month's worth of money upfront, then 23 payments? Thanks.

Yes

Thanks.

[barrieeld]

it wont be my only car but for weekday commutes to work where i dont have any passengers i thought it would be not a bad place to be...

Ive had a few MB's in the past but for the price of what most leasing company are charging for a c250 cdi SE its got to be worth a punt.

I would never buy one of these new...just too much depreciation but as a lease vehicle it makes a bit more sense...well in a man maths kind of way?

[barrieeld]

Maybe so...but what new car of £70k would depreciate £5k per annum? I suspect you'd loose £10k the moment you drive it off the four court which makes my lease deal very appealing as an ownership prospect for the next 2 years.

To put things into perspective I can today lease a golf GTD and pay £3.5k per annum?

I've heard various "urban legend" about handing back lease cars but have many friends who actually do lease from MB every 2 years and haven't had a problem so we'll wait and see I suppose...if I get "bent over" you guys will be 1st to know

[gizlaroc]

hora said:

Even if the car is trade price someones got to pay somewhere. You pay say just under 10k for a car for two years- who pays the different in depreciation and original buy-in cost? Hmmmm.

Mercedes buy the car with 12-15% discount, shift 25 of that model and get a further 10% in kick backs, then as they own the car they can claim the vat on it back, thus it means that £70k car has cost them around £47k, if they rent it out for £10,000 over 2 years it will need to get £37k trade at year two, it will easily see £42k, so they have made around £5000 and got another car out there and someone into a Merc.

[northwest monkey]

hora said:

Most of those seem fair.

This one:
Tyres with excessive wear not matching age or mileage of your Mercedes-Benz.



Thats weird. How do you police that? It seems open to ambiguity. i.e We need to replace 4 tyres at our prices sir (£150x4)?

I think it probably means that after 2 years & 16k miles, the tyres shouldn't be down to the canvas from burnouts etc.

[barrieeld]

hora said:

Cheers, good to see a break down. OP I don't want to see your bent-over. I'd rather see you stood straight up, glint in your eye and in a good car

hahahahah

[CYMR0]

gizlaroc said:

Mercedes buy the car with 12-15% discount, shift 25 of that model and get a further 10% in kick backs, then as they own the car they can claim the vat on it back, thus it means that £70k car has cost them around £47k, if they rent it out for £10,000 over 2 years it will need to get £37k trade at year two, it will easily see £42k, so they have made around £5000 and got another car out there and someone into a Merc.

Sort of but even if the VAT doesn't have to be paid on the original purchase price, just on the rentals, it would then also have to be paid when it's traded on: e.g., assuming £40k book price and ignoring the cost of finance:

Purchase price - £70k inc VAT = £58,333
Dealer discount - 15% = £8750
Dealer volume bonus - 10% = £5,833
Net cost = £43,750
Trade book - £37k inc vat = £30,833 ex VAT

Therefore you have to cover £43,750 - £30,833 = £12,917 + VAT / 29 on a 6+23 = £445 + VAT, assuming that all the profit in the deal comes on the back end: excess mileage charges (or retained value because the car isn't used), reconditioning, and resale.

At £279 then either the car has to be at £38,924 + VAT (which is about £46k all in) or the trade value has to be higher than £37k.

[gizlaroc]

They are definitely gambling on future values, and in many cases the deals that the manufacturers throw at certain models to get them out there are unreal, but you will only see them as contract hire so the real deal stays hidden and they can control the used values at the end.

In 2 years time how many people will look back and think "two years ago I could have hired this car for £279' ?? It will be long forgotten.