RE: BMW M3 (F80): PH Carpool

[mikeN54]

MrBarry123 said:

It depends whether it's a PCH or PCP agreement.

If it is a PCP, at the end of the term he has the option of buying a car worth £30k for significantly less than £30k i.e. whatever the GFV figure is.

Eh? If it's a lease it's a lease or hire (PCH).

A PCP is a purchase not a hire or lease. And unless BMW are daft the GFV will be pretty much exactly what the used value will be. If it is less than the market value then you have overpaid down to that figure during your payment period and any sale profit is just getting that overpayment back.

Edited by mikeN54 on Monday 6th June 21:58

[MrBarry123]

mikeN54 said:

Eh? If it's a lease it's a lease or hire (PCH).

A PCP is a purchase not a hire or lease. And unless BMW are daft the GFV will be pretty much exactly what the used value will be. If it is less than the market value then you have overpaid down to that figure during your payment period and any sale profit is just getting that overpayment back.

Edited by mikeN54 on Monday 6th June 21:58

Eh?

My comment was regarding the idea that after having paid all of that money in the 3 year period, you would just have to hand the car back i.e. if it's PCP, you don't.

[PistonBroker]

Great Carpool, thanks for sharing OP.

Also confused by the mention of lease and then APR. Does OP mean he's got a PCP but he's expecting to hand it back at the end?

I'm leasing - actual leasing! - because I couldn't get the figures to stack up any other way personally. PCP on the car I've got was more down initially, more monthly, and still with the likelihood that I'd just leave it with the dealer at the end and roll into another deal.

[culpz]

fastgerman said:

M3Maverick said:

I went in to Audi recently to buy a 3 year old S4 and was horrified at the figures quoted. It was cheaper to lease a brand new RS6 from a third party instead...

Ignore the people who frown at leasing.

Hows this please? :-)

1 - buying approved used for £30k, £5k down and £25k loan over 4 years:
Monthly repayment
£592.90
Representative
6.7% APR
Total amount payable
£28,459.41

2 - lease - you tell me :-)


Main argument I guess is option 1 is still £15k back after 4 years. Option 2 will be nothing back and a bigger dent to the wallet?

You're missing the point/benefits of leasing. You agree from the start of the agreement that you will not own the car. Leasing is just renting at the end of the day. But everything is fixed costs so generally no nasty surprises to look out for.

What i'm saying is that it only takes 1 out of warranty bill to send you over the edge on your suggestion. You also need to consider your road tax, extended warranty cost (if that's what you want), breakdown cover, MOT and so on. I'm sure you see what i'm getting at here.

It also might not leave you with a bigger dent in you wallet depending on what deal you get. There's not enough information here to compare and find out who's getting the better deal. Remember, either car in question is most likely a depreciating asset so ownership is not always what it's cracked up to be.

[mikeN54]

MrBarry123 said:

My comment was regarding the idea that after having paid all of that money in the 3 year period, you would just have to hand the car back i.e. if it's PCP, you don't.

Sorry, I thought you were calling PCP a lease variant.

But PCPs are usually more to pay than PCH / lease hire so not really comparable.

Yes you don't have to hand it back at the end of a PCP, but most do for sure, that's what they want. PCP appeals to the "owner" in us all.

Edited by mikeN54 on Tuesday 7th June 13:33

[mikeN54]

culpz said:

You're missing the point/benefits of leasing. You agree from the start of the agreement that you will not own the car. Leasing is just renting at the end of the day. But everything is fixed costs so generally no nasty surprises to look out for.

What i'm saying is that it only takes 1 out of warranty bill to send you over the edge on your suggestion. You also need to consider your road tax, extended warranty cost (if that's what you want), breakdown cover, MOT and so on. I'm sure you see what i'm getting at here.

It also might not leave you with a bigger dent in you wallet depending on what deal you get. There's not enough information here to compare and find out who's getting the better deal. Remember, either car in question is most likely a depreciating asset so ownership is not always what it's cracked up to be.

Bingo.

Folks are so hung up on "ownership" when in reality unless you are keeping it forever you're only "lumbered with it" whilst funding the depreciation until you pass it on. People say to me "why do you clean your car when you don't own it?" I say that tells me a lot about perception of leasing. But I just say "because I like driving a clean car, why do you clean yours?"

After analysing it carefully, all anyone wants with a daily driver car is value for money £/month or £/mile depending on your usage pattern, and exclusive use of the vehicle for a set term. What more do you need?

I got my last 2 cars on lease (proper lease hire) it's great, fixed costs, no suprises and bargains abound. Now I've got an M6 gran coupe for £200/m less than this thread M3 cost. £100K car, No worries, full warranty, no MOTs or any of that business.

In exactly 3 years a nice man will come and collect it from my house, so I can time the delivery of the next car on the same day.

I call THAT stress free motoring!

All this poop about nasty bills for minor damage is just from those who didn't read the Ts&Cs. All damage limits are clearly defined from the outset. Number and size of scratches, dents, wheel scuffs etc that you are allowed. Interior marks etc. Treat it right and you cant go wrong. Treat it like an airport rental and you know what will happen. Just cancel your direct debit just before collection then they will have to chase for any costs and you can have time to get it checked properly.

Still no different to trading in a car, if its damaged you'll get less for it, so you pay the same then.

Edited by mikeN54 on Tuesday 7th June 13:43

[mikeN54]

nickfrog said:

Great car !!

If it's leased, I reckon you can't track it, even on a Ring TF...

Ts&Cs restrict time trials or pacemaking etc but no "track day" exlusions. Ring is a public road (or was).

These are the same generic restrictions as PCP / HP / PCH or any secured car finance I've ever read the terms for, so probably most cars on the road are "banned" from track days.

In any case what would they do? Take the car off you? Slap your wrists? Why do you think so many cars have obscured reg plates at track days

Now insurance of course is a whole different matter...

Edited by mikeN54 on Tuesday 7th June 13:57

[MrBarry123]

mikeN54 said:

Sorry, I thought you were calling PCP a lease variant.

But PCPs are usually more to pay than PCH / lease hire so not really comparable.

Yes you don't have to hand it back at the end of a PCP, but most do for sure, that's what they want. PCP appeals to the "owner" in us all.

Edited by mikeN54 on Tuesday 7th June 13:33

Get ya!

Agreed.

[PHMatt]

I'd only lease a brand new car and only then if I didn't intend to keep it.

If you work out the depreciation on an M3 over 12 months vs the cost of leasing it, you'd lose less in the latter circumstances.

On the other side of the coin, you would then lease another one and spend more money the next year and so on and so forth.

Let's say in 3 years time you lose your job and can't make the payments. Then what? Then you give the 3rd M3 you've leased back. And the guy that bought his outright still has his. He can stick it in the garage until he finds a new job, or sell his depreciated asset to pay off any mortgage payments he has to meet for a few months.

[chrispmartha]

PHMatt said:

Let's say in 3 years time you lose your job and can't make the payments. Then what? Then you give the 3rd M3 you've leased back. And the guy that bought his outright still has his. He can stick it in the garage until he finds a new job, or sell his depreciated asset to pay off any mortgage payments he has to meet for a few months.

Let's compare like for like, 2 people have £50k to spend on a new M3, one person Leases it over 2 years, the other buys it cash.

Both lose their jobs in 1 1/2 years time, which position would you rather be in?

first person has what he would have spent on the car in the bank, second person has no money in the bank but his cash tied up in a depreciating asset which he has to fire sale to get cash.

[PHMatt]

chrispmartha said:

PHMatt said:

Let's say in 3 years time you lose your job and can't make the payments. Then what? Then you give the 3rd M3 you've leased back. And the guy that bought his outright still has his. He can stick it in the garage until he finds a new job, or sell his depreciated asset to pay off any mortgage payments he has to meet for a few months.

Let's compare like for like, 2 people have £50k to spend on a new M3, one person Leases it over 2 years, the other buys it cash.

Both lose their jobs in 1 1/2 years time, which position would you rather be in?

first person has what he would have spent on the car in the bank, second person has no money in the bank but his cash tied up in a depreciating asset which he has to fire sale to get cash.

That's all well and good if the lease chap had the cash in the first place. The one that bought it outright definitely had it. The one that leased it probably didn't.

[chrispmartha]

PHMatt said:

chrispmartha said:

PHMatt said:

Let's say in 3 years time you lose your job and can't make the payments. Then what? Then you give the 3rd M3 you've leased back. And the guy that bought his outright still has his. He can stick it in the garage until he finds a new job, or sell his depreciated asset to pay off any mortgage payments he has to meet for a few months.

Let's compare like for like, 2 people have £50k to spend on a new M3, one person Leases it over 2 years, the other buys it cash.

Both lose their jobs in 1 1/2 years time, which position would you rather be in?

first person has what he would have spent on the car in the bank, second person has no money in the bank but his cash tied up in a depreciating asset which he has to fire sale to get cash.

That's all well and good if the lease chap had the cash in the first place. The one that bought it outright definitely had it. The one that leased it probably didn't.

It was the same guy in the example, those were his two options.

The point being, You asked the question, what happens if you lost your job. If I had I would have preferred to have leased the massively depreciating assett and have the cash in the bank.

[PHMatt]

chrispmartha said:

PHMatt said:

chrispmartha said:

PHMatt said:

Let's say in 3 years time you lose your job and can't make the payments. Then what? Then you give the 3rd M3 you've leased back. And the guy that bought his outright still has his. He can stick it in the garage until he finds a new job, or sell his depreciated asset to pay off any mortgage payments he has to meet for a few months.

Let's compare like for like, 2 people have £50k to spend on a new M3, one person Leases it over 2 years, the other buys it cash.

Both lose their jobs in 1 1/2 years time, which position would you rather be in?

first person has what he would have spent on the car in the bank, second person has no money in the bank but his cash tied up in a depreciating asset which he has to fire sale to get cash.

That's all well and good if the lease chap had the cash in the first place. The one that bought it outright definitely had it. The one that leased it probably didn't.

It was the same guy in the example, those were his two options.

The point being, You asked the question, what happens if you lost your job. If I had I would have preferred to have leased the massively depreciating assett and have the cash in the bank.

I couldn't live with the thought of giving a dealer thousand and thousands a year and then having to give it back. Not to mention, I like to not have outgoing funds for the rest of my life.
Some say use the 50k to pay a chunk off the mortgage to release the funds for the car - but my mortgage is 2.8% fixed - car finance is anywhere from 6% to 10%

[irocfan]

PHMatt said:

That's all well and good if the lease chap had the cash in the first place. The one that bought it outright definitely had it. The one that leased it probably didn't.

but you'd still be on the hook for the rest of the contract no? While I agree it's not as much as £50k it could make for an uncomfortable time

[chrispmartha]

PHMatt said:

chrispmartha said:

PHMatt said:

chrispmartha said:

PHMatt said:

Let's say in 3 years time you lose your job and can't make the payments. Then what? Then you give the 3rd M3 you've leased back. And the guy that bought his outright still has his. He can stick it in the garage until he finds a new job, or sell his depreciated asset to pay off any mortgage payments he has to meet for a few months.

Let's compare like for like, 2 people have £50k to spend on a new M3, one person Leases it over 2 years, the other buys it cash.

Both lose their jobs in 1 1/2 years time, which position would you rather be in?

first person has what he would have spent on the car in the bank, second person has no money in the bank but his cash tied up in a depreciating asset which he has to fire sale to get cash.

That's all well and good if the lease chap had the cash in the first place. The one that bought it outright definitely had it. The one that leased it probably didn't.

It was the same guy in the example, those were his two options.

The point being, You asked the question, what happens if you lost your job. If I had I would have preferred to have leased the massively depreciating assett and have the cash in the bank.

I couldn't live with the thought of giving a dealer thousand and thousands a year and then having to give it back. Not to mention, I like to not have outgoing funds for the rest of my life.
Some say use the 50k to pay a chunk off the mortgage to release the funds for the car - but my mortgage is 2.8% fixed - car finance is anywhere from 6% to 10%

Your still paying thousands and thousands a year if you buy a brand new M3 - depreciation doesn't magically disappear well it does if you keep the car till its end life I suppose.

If you plan on keeping the car a fair while then leasing is silly, but if you like to change cars often then leasing can be the cheapest way to do that.

Oh and the point being paying money off your mortgage will shorten your mortgage term and save you interest, you cant compare the rates of mortgages and car finance - unless you are planning on getting a25 year loan for a car.

Just check how much interest you are paying on your mortgage for the full term, 2.8% may sound low but look at the total!

[culpz]

PHMatt said:

I'd only lease a brand new car and only then if I didn't intend to keep it.

If you work out the depreciation on an M3 over 12 months vs the cost of leasing it, you'd lose less in the latter circumstances.

On the other side of the coin, you would then lease another one and spend more money the next year and so on and so forth.

Let's say in 3 years time you lose your job and can't make the payments. Then what? Then you give the 3rd M3 you've leased back. And the guy that bought his outright still has his. He can stick it in the garage until he finds a new job, or sell his depreciated asset to pay off any mortgage payments he has to meet for a few months.

The thing is it's much easier to work out if you can afford a lease compared to buying one that's a few year old and saving a bit of cash on the initial depreciation hit. At the end of the day no-one buys brand new cars outright; it's financial suicide. So you're comparing new to old which is a bit pointless really.

Your costs are fixed and much easier to predict during a lease compared to ownership. Effectively on a lease all you're doing is funding the depreciation of the vehicle. However, by choosing ownership you're still funding the depreciation plus a potential mountain of other bills just to keep the car on the road.

So what if the other person never had the cash for it compared to the person that did? Ask yourself who's the smarter person here and probably got the better deal and spent less overall just not to have ownership of a car. I'd bet it would be the one who took out the lease.