Leasing the used car market
Discussion
Hi all,
Sitting here with a business idea to lease used cars, particularly the mid-upper end of the market (Porsche 911s, Aston V8s, Jag F types, etc). These cars a relatively high in volume (compared to Ferrari's etc.) so more information known, more dealers, etc.
The customer would be pre-approved for credit to a limit, go select the exact car of choice, liaise back with my business and if we are both in agreement, proceed like a 'normal' lease. A small deposit up front, again like a usual lease (6+23)
The agreement would include everything from tax to mot to servicing (tyres at an additional cost) - a complete solution for the customer
I need to understand the VAT rules a little better but by my calculations/estimates on residuals, etc. I think I could lease a used F type (2012 3.0 V6) for around £560 a month, an R8 (2008 4.2) for around £600. Both 6+23 deals, around 15% mark up on costs
Talking to a few friends they think that is reasonable and think there is a market for those who just want to pay a fixed monthly fee without any worry of high bills, the hassle of selling, etc.
What do you think? I can't see this offering anywhere else through a fairly thorough search.
Sitting here with a business idea to lease used cars, particularly the mid-upper end of the market (Porsche 911s, Aston V8s, Jag F types, etc). These cars a relatively high in volume (compared to Ferrari's etc.) so more information known, more dealers, etc.
The customer would be pre-approved for credit to a limit, go select the exact car of choice, liaise back with my business and if we are both in agreement, proceed like a 'normal' lease. A small deposit up front, again like a usual lease (6+23)
The agreement would include everything from tax to mot to servicing (tyres at an additional cost) - a complete solution for the customer
I need to understand the VAT rules a little better but by my calculations/estimates on residuals, etc. I think I could lease a used F type (2012 3.0 V6) for around £560 a month, an R8 (2008 4.2) for around £600. Both 6+23 deals, around 15% mark up on costs
Talking to a few friends they think that is reasonable and think there is a market for those who just want to pay a fixed monthly fee without any worry of high bills, the hassle of selling, etc.
What do you think? I can't see this offering anywhere else through a fairly thorough search.
funt1m3 said:
Hi all,
Sitting here with a business idea to lease used cars, particularly the mid-upper end of the market (Porsche 911s, Aston V8s, Jag F types, etc). These cars a relatively high in volume (compared to Ferrari's etc.) so more information known, more dealers, etc.
The customer would be pre-approved for credit to a limit, go select the exact car of choice, liaise back with my business and if we are both in agreement, proceed like a 'normal' lease. A small deposit up front, again like a usual lease (6+23)
The agreement would include everything from tax to mot to servicing (tyres at an additional cost) - a complete solution for the customer
I need to understand the VAT rules a little better but by my calculations/estimates on residuals, etc. I think I could lease a used F type (2012 3.0 V6) for around £560 a month, an R8 (2008 4.2) for around £600. Both 6+23 deals, around 15% mark up on costs
Talking to a few friends they think that is reasonable and think there is a market for those who just want to pay a fixed monthly fee without any worry of high bills, the hassle of selling, etc.
What do you think? I can't see this offering anywhere else through a fairly thorough search.
Initially I thought this was a good idea, but then what about repairs for mechanical failures? I guess the reason leasing on new cars is so common is the cars are under manufacturers warranty. These sort of cars could throw some pretty eye watering repair bills.Sitting here with a business idea to lease used cars, particularly the mid-upper end of the market (Porsche 911s, Aston V8s, Jag F types, etc). These cars a relatively high in volume (compared to Ferrari's etc.) so more information known, more dealers, etc.
The customer would be pre-approved for credit to a limit, go select the exact car of choice, liaise back with my business and if we are both in agreement, proceed like a 'normal' lease. A small deposit up front, again like a usual lease (6+23)
The agreement would include everything from tax to mot to servicing (tyres at an additional cost) - a complete solution for the customer
I need to understand the VAT rules a little better but by my calculations/estimates on residuals, etc. I think I could lease a used F type (2012 3.0 V6) for around £560 a month, an R8 (2008 4.2) for around £600. Both 6+23 deals, around 15% mark up on costs
Talking to a few friends they think that is reasonable and think there is a market for those who just want to pay a fixed monthly fee without any worry of high bills, the hassle of selling, etc.
What do you think? I can't see this offering anywhere else through a fairly thorough search.
If I was leasing a car like this would I want to spend 10k on an engine failure on a car I'm handing back in 12 months? I don't think I would. If you covered these costs yourself I would imagine it would swallow up most of the profits?
No all costs I would cover. Those sort of big bills you speak of are the big scare yes, but this business would benefit from economies of scale. Not only by splitting these big bills over 100s of cars, but by having buyer power with independent garages
Just how often are those £10k bills on these modern cars? 1 in 25, 50? We all know "a guy who spent £15k in 18 months on a Porsche Boxster" but that is only because these stories are written up, not a lot of owners discuss the relatively pain free motoring on these cars.
Wow just noticed this is my first post on PH. I've been on here for years. That's some good lurking!
Just how often are those £10k bills on these modern cars? 1 in 25, 50? We all know "a guy who spent £15k in 18 months on a Porsche Boxster" but that is only because these stories are written up, not a lot of owners discuss the relatively pain free motoring on these cars.
Wow just noticed this is my first post on PH. I've been on here for years. That's some good lurking!
Have you looked into all the financial services regulations? There was a thread on this general topic a few months ago, many points highlighted.
Just as a comparison Nationwide Leasing do the V6 3.0 Convertible F-type on a 6+23 business lease at 10K miles/annum for £812, the V6S at £910. Cannot see whether that includes servicing and/or tyres. I think you need to do a bit more homework on this.
Just as a comparison Nationwide Leasing do the V6 3.0 Convertible F-type on a 6+23 business lease at 10K miles/annum for £812, the V6S at £910. Cannot see whether that includes servicing and/or tyres. I think you need to do a bit more homework on this.
Also from Nationwide Leasing the Aston V8 Vantage coupe = £1948/month, with sportshift = £2049/month
These are again for 6+23 and 10K miles/annum
Cut the miles to 8K per annum makes a £35/month reduction
Audi R8 prices start at £1763/month
Alfa Romeo Guilia 2.9V6 Biturbo starts at £825/month
Check it out:
https://www.nationwidevehiclecontracts.co.uk/car-s...
These are again for 6+23 and 10K miles/annum
Cut the miles to 8K per annum makes a £35/month reduction
Audi R8 prices start at £1763/month
Alfa Romeo Guilia 2.9V6 Biturbo starts at £825/month
Check it out:
https://www.nationwidevehiclecontracts.co.uk/car-s...
Hi. I have completed a little research but agree the FCA regs and all things consumer credit would be a stumbling block. That being said I did find out that 49,000 companies are registered by FCA to provide credit services. How hard can it be...😉
The £560 I've noted is a 30% saving on the 812 you have. Obviously new vs old but I for one love a 3 year old car. Let the chap/chappess who has to have new pay the bulk of the depreciation. More great cars for me.
Of course plenty of homework still to do. First you got to find out if there is a market right?
The £560 I've noted is a 30% saving on the 812 you have. Obviously new vs old but I for one love a 3 year old car. Let the chap/chappess who has to have new pay the bulk of the depreciation. More great cars for me.
Of course plenty of homework still to do. First you got to find out if there is a market right?
funt1m3 said:
Hi. I have completed a little research but agree the FCA regs and all things consumer credit would be a stumbling block. That being said I did find out that 49,000 companies are registered by FCA to provide credit services. How hard can it be...??
The £560 I've noted is a 30% saving on the 812 you have. Obviously new vs old but I for one love a 3 year old car. Let the chap/chappess who has to have new pay the bulk of the depreciation. More great cars for me.
Of course plenty of homework still to do. First you got to find out if there is a market right?
I for one love 3 yr old cars, they are my normal buying age, last car 3.5 years for peanuts for what is a great car - 640dCoupeThe £560 I've noted is a 30% saving on the 812 you have. Obviously new vs old but I for one love a 3 year old car. Let the chap/chappess who has to have new pay the bulk of the depreciation. More great cars for me.
Of course plenty of homework still to do. First you got to find out if there is a market right?
I can't see how you could make it work I think it's too cheap.
Personally I think this is a good concept if you can manage make it work in practice
I have thought that some lease deals look attractive in spite of the lease company buying a new car and they are therefore missing the saving from starting with a depreciated car.
As has been pointed out there are more variables which might mean you need a safety margin but hopefully the safety margin will not destroy the inherent advantage
I have thought that some lease deals look attractive in spite of the lease company buying a new car and they are therefore missing the saving from starting with a depreciated car.
As has been pointed out there are more variables which might mean you need a safety margin but hopefully the safety margin will not destroy the inherent advantage
Is nobody doing this already? You can certainly lease a used bike, my BMW is on a BMW plan, it was 3.5 years old when I got it. 10% deposit, low monthlies, 15k pa miles, and after 3 years I get to use any equity for another bike, or just hand it back.
It's also under a comprehensive BMW warranty for the first two years (and I expect they'll try and sell me an extension for the third year) so that takes the breakdown factor out for me. I do pay for tyres and servicing though.
It's also under a comprehensive BMW warranty for the first two years (and I expect they'll try and sell me an extension for the third year) so that takes the breakdown factor out for me. I do pay for tyres and servicing though.
CAPP0 said:
Is nobody doing this already? You can certainly lease a used bike, my BMW is on a BMW plan, it was 3.5 years old when I got it. 10% deposit, low monthlies, 15k pa miles, and after 3 years I get to use any equity for another bike, or just hand it back.
It's also under a comprehensive BMW warranty for the first two years (and I expect they'll try and sell me an extension for the third year) so that takes the breakdown factor out for me. I do pay for tyres and servicing though.
yes, you can already get used car leasing, classic car leasing etcIt's also under a comprehensive BMW warranty for the first two years (and I expect they'll try and sell me an extension for the third year) so that takes the breakdown factor out for me. I do pay for tyres and servicing though.
funt1m3 said:
Hi
yes i've seen them but they are just some cars from stock and nothing there of interest for the true petrol head! And £807pm for a used 6 series diesel? zzzzz
I propose you go out and select the car YOU want.
Thanks for the replies guys. Keep them coming.
so they scour the country, find a nice car, you'd still have to inspect and value that car, give a future value, and in fact you'd own it of courseyes i've seen them but they are just some cars from stock and nothing there of interest for the true petrol head! And £807pm for a used 6 series diesel? zzzzz
I propose you go out and select the car YOU want.
Thanks for the replies guys. Keep them coming.
It does go on in Germany, I see a lot of advertising for people to lease a classic as a company car and get certain tax advantages
with very low mileage classics you can maybe have a better idea of future value, it could of course go up in value too - same may apply to certain nearly new supercars too I suppose
I can walk into any car dealer and effectively lease a 3 year old car via PCP and hand it back at the end of the term. It will have full main dealer backing and a 1 year warranty plus servicing usually chucked in as part of the deal. I'm not sure what you are proposing is offering anything really different over and above PCP'ing a used car from a dealer?
jaisharma said:
Personally I think this is a good concept if you can manage make it work in practice
I have thought that some lease deals look attractive in spite of the lease company buying a new car and they are therefore missing the saving from starting with a depreciated car.
They get large discounts which offsets a fair chunk of depreciationI have thought that some lease deals look attractive in spite of the lease company buying a new car and they are therefore missing the saving from starting with a depreciated car.
Yes very similar however not all dealers are the same. Some do offer some excellent packages, and some perhaps not so. With me (and this will take time I know) you get the gold standard start to finish. Customer satisfaction absolute key here. Pre-approved credit would allow the customer the freedom (to a certain extent - no yellow Bentley Conti's please!) and not tied into a perhaps a 2nd choice just because they favour that dealer's finance package over another
Plus some rates are much higher than I calculate. What would be reasonable estimate for the cost per year on 50 Audi R8s (to allow for spread of cars). £2500 per annum? That's £250k in a 2 year period I budget. I think that would cover inc. buffer
As the business grows, knowledge grows, buyer power grows and more predictable profits/pricing comes into play
Plus some rates are much higher than I calculate. What would be reasonable estimate for the cost per year on 50 Audi R8s (to allow for spread of cars). £2500 per annum? That's £250k in a 2 year period I budget. I think that would cover inc. buffer
As the business grows, knowledge grows, buyer power grows and more predictable profits/pricing comes into play
If a dealer doesn't have a deal I like, I walk and go to another. Seriously still not seeing what value you will add, over and above me walking into my local Audi showroom and financing a 3 year old Audi R8 on PCP for £700 a month with a one year warranty, free servicing for 2 years and I can just hand it back at the end?
Short term hire of sportscars works because you can charge a massive premium for letting someone hire a car for just a few days. Your long term used car leasing will have to be competitive price wise against traditional PCP deals which are backed by the huge finance houses of the manufacturers, I just don't see how you are going to be able to be competitive as a relatively small scale operation against those.
Short term hire of sportscars works because you can charge a massive premium for letting someone hire a car for just a few days. Your long term used car leasing will have to be competitive price wise against traditional PCP deals which are backed by the huge finance houses of the manufacturers, I just don't see how you are going to be able to be competitive as a relatively small scale operation against those.
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