Leasing - Perils & Pitfalls... should I?
Discussion
Guys,
Sitting here debating a car, need it for the short trip to the station, a bit of motorway at weekend, some spirited b-road stuff, and a few jaunts up north that wrack the miles up. Still be under 10k per annum though.
Whilst we aren't skint, we are cash-tight right now as we intend to plough what we have into a mortgage. As such, I am restriced to either buying something for max 5k second-hand, or possibly lease a car over the next 2 years before the family expands. There's a few nice coupe/softtops out there right now and I had never thought of leasing a car.
Can anyone advise the pitfalls perils? We can handle 250-300 a month going out, and it would be preferable to womping down a few grand on a used motor. Plus I get something satisfying for once.
However, PH is the font of knowledge - should leasing be an option? Does it work for people? I hear horror stories about scratches and going over 10k mileage a year etc etc.
Also, I have my own limited company - would a business lease make more sense than personal?
Any help would be great - the c-class coupe is tempting me right now or some sort of slk/tt/hairdresser fun (can blame it on the missus and pretend her car is mine lol).
Sitting here debating a car, need it for the short trip to the station, a bit of motorway at weekend, some spirited b-road stuff, and a few jaunts up north that wrack the miles up. Still be under 10k per annum though.
Whilst we aren't skint, we are cash-tight right now as we intend to plough what we have into a mortgage. As such, I am restriced to either buying something for max 5k second-hand, or possibly lease a car over the next 2 years before the family expands. There's a few nice coupe/softtops out there right now and I had never thought of leasing a car.
Can anyone advise the pitfalls perils? We can handle 250-300 a month going out, and it would be preferable to womping down a few grand on a used motor. Plus I get something satisfying for once.
However, PH is the font of knowledge - should leasing be an option? Does it work for people? I hear horror stories about scratches and going over 10k mileage a year etc etc.
Also, I have my own limited company - would a business lease make more sense than personal?
Any help would be great - the c-class coupe is tempting me right now or some sort of slk/tt/hairdresser fun (can blame it on the missus and pretend her car is mine lol).
The stand-out lease bargain at the moment is the Merc SLK 250CDI (http://www.pistonheads.com/gassing/topic.asp?h=0&f=96&t=1172054&mid=166640&nmt=SLK+250+CDI+SPORT)
£250-300/month seems the current going rate.
Pitfulls
- you get hit with charges at the end for excess wear and tear. This is clearly stated in teh T&C.
- you are tied in to the full term of the lease period
- excess mileage ~15p per mile
Business vs Private
For me Private worked out cheaper. Chat to your accountant to confirm
£250-300/month seems the current going rate.
Pitfulls
- you get hit with charges at the end for excess wear and tear. This is clearly stated in teh T&C.
- you are tied in to the full term of the lease period
- excess mileage ~15p per mile
Business vs Private
For me Private worked out cheaper. Chat to your accountant to confirm
t that's decent. Gonna have a look.The cheapest deals I found were on:
http://www.lakelandvehiclesolutions.co.uk/personal...
http://www.freedomcontracts.com/
http://www.lakelandvehiclesolutions.co.uk/personal...
http://www.freedomcontracts.com/
The biggest issue for me with a lease is the commitment. If your circumstances change (especially when limited to 10k, which is less than you think) then it is expensive to get out of one.
If you go in with your eyes open though, and understand this, they can offer the cheapest way into a brand new car.
If you go in with your eyes open though, and understand this, they can offer the cheapest way into a brand new car.
I've leased my C class since Nov 2011, I will be handing it back in Nov.
I get bored of cars easily, normally look to change cars every 1-2 years and I don't like driving second hand motors, therefore leasing is most cost effective for my circumstances.
I paid:
Deposit = £1728.00
23 x £288.00 = £6624.00
Service = £244.48
Therefore the car will cost me £8596.48 over the term or £4298.24 per annum
At the end of the term I hand back the car and keys and will probably look to get a good deal on a similar car
If you compare this with traditional Purchase Cost. The same spec car (I have the C250 CDI BlueEFF AMG Sport Ed with Command, leather, 7sp Auto, Metalic as extras) I believe OTR would be approx £32500 New (The online config quotes higher but I was able to get a good price through my local MB dealer for the same).
The Value of the car regardless of the purchase method would be approx 19-21k
So I would have made a loss of at least £11500 over the same term on depreciation (taking the 21K value) + whatever extra I would have paid on finance by owning the car versus leasing it.
Leasing has always been the best option for me given the type of car and frequency that I get bored of it.
I get bored of cars easily, normally look to change cars every 1-2 years and I don't like driving second hand motors, therefore leasing is most cost effective for my circumstances.
I paid:
Deposit = £1728.00
23 x £288.00 = £6624.00
Service = £244.48
Therefore the car will cost me £8596.48 over the term or £4298.24 per annum
At the end of the term I hand back the car and keys and will probably look to get a good deal on a similar car
If you compare this with traditional Purchase Cost. The same spec car (I have the C250 CDI BlueEFF AMG Sport Ed with Command, leather, 7sp Auto, Metalic as extras) I believe OTR would be approx £32500 New (The online config quotes higher but I was able to get a good price through my local MB dealer for the same).
The Value of the car regardless of the purchase method would be approx 19-21k
So I would have made a loss of at least £11500 over the same term on depreciation (taking the 21K value) + whatever extra I would have paid on finance by owning the car versus leasing it.
Leasing has always been the best option for me given the type of car and frequency that I get bored of it.
The mileage limit is the important thing. I was always put off leases by not being able (or wanting) to commit to a certain mileage 3 or 4 years in the future.
Then the opportunity for an 18 month lease came along at a 'loss leader' type price and I signed up for 15k miles a year (as I'd done 12-14k a year for the past 3 years).
The first year is up at the end of April and due to being busy at work I've not had many weekends away so have only done 8k miles so have paid c.£50 a month for miles I've not done. That might annoy you if you are a "watch the pennies" type person.
It also allows you to pick silly paint colours and avoid expensive options as you aren't worried about resale.
With 7 months to go I'm still liking the concept, but might change my mind in October when the final bill comes in.
So, my recommendation is to be much more open minded when searching as the lease price doesn't seem to bear any relation to the outright list price, eg. my Volvo is the same OTR price as the "bargain of the century" BMW M135i but costs a third of the lease price.
Then the opportunity for an 18 month lease came along at a 'loss leader' type price and I signed up for 15k miles a year (as I'd done 12-14k a year for the past 3 years).
The first year is up at the end of April and due to being busy at work I've not had many weekends away so have only done 8k miles so have paid c.£50 a month for miles I've not done. That might annoy you if you are a "watch the pennies" type person.
It also allows you to pick silly paint colours and avoid expensive options as you aren't worried about resale.
With 7 months to go I'm still liking the concept, but might change my mind in October when the final bill comes in.
So, my recommendation is to be much more open minded when searching as the lease price doesn't seem to bear any relation to the outright list price, eg. my Volvo is the same OTR price as the "bargain of the century" BMW M135i but costs a third of the lease price.
77bd82 said:
I've leased my C class since Nov 2011, I will be handing it back in Nov.
I get bored of cars easily, normally look to change cars every 1-2 years and I don't like driving second hand motors, therefore leasing is most cost effective for my circumstances.
I paid:
Deposit = £1728.00
23 x £288.00 = £6624.00
Service = £244.48
Therefore the car will cost me £8596.48 over the term or £4298.24 per annum
At the end of the term I hand back the car and keys and will probably look to get a good deal on a similar car
If you compare this with traditional Purchase Cost. The same spec car (I have the C250 CDI BlueEFF AMG Sport Ed with Command, leather, 7sp Auto, Metalic as extras) I believe OTR would be approx £32500 New (The online config quotes higher but I was able to get a good price through my local MB dealer for the same).
The Value of the car regardless of the purchase method would be approx 19-21k
So I would have made a loss of at least £11500 over the same term on depreciation (taking the 21K value) + whatever extra I would have paid on finance by owning the car versus leasing it.
Leasing has always been the best option for me given the type of car and frequency that I get bored of it.
Very similar to me, I get bored. This looks good. I am debating the slk or maybe a c-class coupe, not sure right now. I may even up the mileage to 15k just in case. Appreciate the maths, that helps me understand.I get bored of cars easily, normally look to change cars every 1-2 years and I don't like driving second hand motors, therefore leasing is most cost effective for my circumstances.
I paid:
Deposit = £1728.00
23 x £288.00 = £6624.00
Service = £244.48
Therefore the car will cost me £8596.48 over the term or £4298.24 per annum
At the end of the term I hand back the car and keys and will probably look to get a good deal on a similar car
If you compare this with traditional Purchase Cost. The same spec car (I have the C250 CDI BlueEFF AMG Sport Ed with Command, leather, 7sp Auto, Metalic as extras) I believe OTR would be approx £32500 New (The online config quotes higher but I was able to get a good price through my local MB dealer for the same).
The Value of the car regardless of the purchase method would be approx 19-21k
So I would have made a loss of at least £11500 over the same term on depreciation (taking the 21K value) + whatever extra I would have paid on finance by owning the car versus leasing it.
Leasing has always been the best option for me given the type of car and frequency that I get bored of it.
Funnily enough I saw the citroen ds3 was going dirt cheap. Not that it would be for me but I think that's a superb-looking little car and also it's not a mini. if I wasn't so tall and wanted some ooomph I would look at that.
Just need to look at doing it through my ltd company or a personal lease.
Mileage:
15k/yr deals were ~£40/month more than 10k/yr deals.
When you do the maths, you'll see with excess mileage @15ppm, you can sign up for 10k/yr but actually do 14k/yr and be no worse off if you'd signed the 15k/yr deal in the first place.
I'm also lead to believe you can change the annual mileage allowance after 6 months, should you wish.
15k/yr deals were ~£40/month more than 10k/yr deals.
When you do the maths, you'll see with excess mileage @15ppm, you can sign up for 10k/yr but actually do 14k/yr and be no worse off if you'd signed the 15k/yr deal in the first place.
I'm also lead to believe you can change the annual mileage allowance after 6 months, should you wish.
wemorgan said:
Mileage:
15k/yr deals were ~£40/month more than 10k/yr deals.
When you do the maths, you'll see with excess mileage @15ppm, you can sign up for 10k/yr but actually do 14k/yr and be no worse off if you'd signed the 15k/yr deal in the first place.
I'm also lead to believe you can change the annual mileage allowance after 6 months, should you wish.
V good spot. Thanks.15k/yr deals were ~£40/month more than 10k/yr deals.
When you do the maths, you'll see with excess mileage @15ppm, you can sign up for 10k/yr but actually do 14k/yr and be no worse off if you'd signed the 15k/yr deal in the first place.
I'm also lead to believe you can change the annual mileage allowance after 6 months, should you wish.
Leases can work very well if:
You're happy to keep the car for the full term of the lease
You're flexible on exactly what car you want (I add this simply because there are always 'special offers' going around on various makes & models, and in many of these cases you'll get into a new car for less than the cost of depreciation). The Mercedes are a case in point and are excellent value.
They don't work so well if you want to chop & change cars regularly (i.e. under 2 years) as the termination fees can be quite large.
I do this for a living, happy to give quotes by email for anything you are interested in (feel free to message me).
Cheers, Richard
You're happy to keep the car for the full term of the lease
You're flexible on exactly what car you want (I add this simply because there are always 'special offers' going around on various makes & models, and in many of these cases you'll get into a new car for less than the cost of depreciation). The Mercedes are a case in point and are excellent value.
They don't work so well if you want to chop & change cars regularly (i.e. under 2 years) as the termination fees can be quite large.
I do this for a living, happy to give quotes by email for anything you are interested in (feel free to message me).
Cheers, Richard
77bd82 said:
I paid:
Deposit = £1728.00
23 x £288.00 = £6624.00
Service = £244.48
If you compare this with traditional Purchase Cost. The same spec car (I have the C250 CDI BlueEFF AMG Sport Ed with Command, leather, 7sp Auto, Metalic as extras) I believe OTR would be approx £32500 New (The online config quotes higher but I was able to get a good price through my local MB dealer for the same).
That is mega cheap for a 250 with that spec. Do the monthly prices include VAT?Deposit = £1728.00
23 x £288.00 = £6624.00
Service = £244.48
If you compare this with traditional Purchase Cost. The same spec car (I have the C250 CDI BlueEFF AMG Sport Ed with Command, leather, 7sp Auto, Metalic as extras) I believe OTR would be approx £32500 New (The online config quotes higher but I was able to get a good price through my local MB dealer for the same).
By the way, not a massive deal, but can you really avoid the second year service?
This might not be that helpful but do you know anyone who works for any car manufacturer? If so some places do generous leases for employees - we had a brand new Mini One just over £200 which included Tax & insurance and just added fuel. however you could choose anything from BMW, the best thing was it was 8-9 month leases, you just swap the car over for a brand new one at the end. the deal we had was because I was a partner of a relative of BMW. I'm not sure if it can extent to friend of family but might be worth asking if you know any one who works in those places.
Edit: to add there was a 8000 mile limit on the cars, but the time you had it for you could vary if you use higher or lower miles, but was always 8000 max.
Edit: to add there was a 8000 mile limit on the cars, but the time you had it for you could vary if you use higher or lower miles, but was always 8000 max.
Edited by timtoo2 on Wednesday 13th March 13:10
rfoster said:
Leases can work very well if:
You're happy to keep the car for the full term of the lease
You're flexible on exactly what car you want (I add this simply because there are always 'special offers' going around on various makes & models, and in many of these cases you'll get into a new car for less than the cost of depreciation). The Mercedes are a case in point and are excellent value.
They don't work so well if you want to chop & change cars regularly (i.e. under 2 years) as the termination fees can be quite large.
I do this for a living, happy to give quotes by email for anything you are interested in (feel free to message me).
Cheers, Richard
That's great thank you I will have a think!You're happy to keep the car for the full term of the lease
You're flexible on exactly what car you want (I add this simply because there are always 'special offers' going around on various makes & models, and in many of these cases you'll get into a new car for less than the cost of depreciation). The Mercedes are a case in point and are excellent value.
They don't work so well if you want to chop & change cars regularly (i.e. under 2 years) as the termination fees can be quite large.
I do this for a living, happy to give quotes by email for anything you are interested in (feel free to message me).
Cheers, Richard
If you are me (as 77bd82 seems to be) then leasing is very often the best way forward.
So, if you do change cars frequently, drive a moderate number of miles, don't need mega performance, are flexible on what you drive, can cope with a monthly payment, like to look after a car cosmetically, and don't have the time to deal with mechanical repairs, leasing is a good way forward.
If you like to run a car into the ground (whether over time or mileage), hate an ongoing financial commitment, and are either relaxed about a car's cosmetic appearance or happy to work out the best way to fix a broken car over time (or both) then it doesn't make sense.
So, if you do change cars frequently, drive a moderate number of miles, don't need mega performance, are flexible on what you drive, can cope with a monthly payment, like to look after a car cosmetically, and don't have the time to deal with mechanical repairs, leasing is a good way forward.
If you like to run a car into the ground (whether over time or mileage), hate an ongoing financial commitment, and are either relaxed about a car's cosmetic appearance or happy to work out the best way to fix a broken car over time (or both) then it doesn't make sense.
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