Best lease car deals available?
Discussion
bmthnick1981 said:
gizlaroc said:
That really is a cracking deal, paying the same on my e220 CDI! Chipmunk1 said:
Ford are knocking the Fiesta ST out very cheap, so cheap that my local dealer even has cars at Tesco for £500 deposit and £150 per month , I haven't looked online yet though
Just tried searching online, couldn't find anything. Let me know where this deal is please pal16v stretch said:
Just got a quote request back for an IS300H.... Very bloody tempting.
But add in metallic, and some options and it's the pretty much the same monthly as what I managed to negotiate to buy one.
What the cost of the lease deal pre and post options?But add in metallic, and some options and it's the pretty much the same monthly as what I managed to negotiate to buy one.
Also, with the buying one- the actual monthly payments are irrelevant aren't they? The only relevance is the depreciation
What's with the cost of extras on lease deals?
I have noticed with all lease deals I have looked at that any extra you effectively pay the full price of, split over the 3 years.
THis would explain why so many ex lease cars are standard.
Why do they do this? A fully specced car is worth more than a basic car for resale, and is indeed easier to sell. Further, mark-up on extras is so monstrous you would think they would encourage leasers to get as many extras as possible. And yet with the prices they effectively discourage it. I don't get it.
I have noticed with all lease deals I have looked at that any extra you effectively pay the full price of, split over the 3 years.
THis would explain why so many ex lease cars are standard.
Why do they do this? A fully specced car is worth more than a basic car for resale, and is indeed easier to sell. Further, mark-up on extras is so monstrous you would think they would encourage leasers to get as many extras as possible. And yet with the prices they effectively discourage it. I don't get it.
blindswelledrat said:
What's with the cost of extras on lease deals?
I have noticed with all lease deals I have looked at that any extra you effectively pay the full price of, split over the 3 years.
THis would explain why so many ex lease cars are standard.
Why do they do this? A fully specced car is worth more than a basic car for resale, and is indeed easier to sell. Further, mark-up on extras is so monstrous you would think they would encourage leasers to get as many extras as possible. And yet with the prices they effectively discourage it. I don't get it.
It actually depends.I have noticed with all lease deals I have looked at that any extra you effectively pay the full price of, split over the 3 years.
THis would explain why so many ex lease cars are standard.
Why do they do this? A fully specced car is worth more than a basic car for resale, and is indeed easier to sell. Further, mark-up on extras is so monstrous you would think they would encourage leasers to get as many extras as possible. And yet with the prices they effectively discourage it. I don't get it.
Certain cars, in particular BMW with Pro/Business Media packages can effect the residual value. Often, on higher end stuff, it's cheaper to go for the top of the range pro nav compared to a business, sometimes even with a car without a nav as a used car without won't sell.
A lot of lease companies don't charge the full price of metallic either because it will be easier to sell (not by much though).
But if you had a £30k Mercedes, and £6k worth of options, you wouldn't expect that used one to be worth £6k more on the used market. Lucky if it's even £1k more. Options depreciate quite badly.
Buzz Lightyear said:
But if you had a £30k Mercedes, and £6k worth of options, you wouldn't expect that used one to be worth £6k more on the used market. Lucky if it's even £1k more. Options depreciate quite badly.
I disagree, but lets find a couple of examples and see. I may as well use an XC60 as an example. Ill find two 3-yeard old ones- one basic and one specced with similar mileage and we will see.blindswelledrat said:
What the cost of the lease deal pre and post options?
Also, with the buying one- the actual monthly payments are irrelevant aren't they? The only relevance is the depreciation
£287.99 incl VAT on a 6 + 23, metallic paint is £600 extra. Nav, Leather, Xenons etc. are all standard.Also, with the buying one- the actual monthly payments are irrelevant aren't they? The only relevance is the depreciation
Looked at a year old F-Sport model as well with all the toys for just over £27k. Depreciated more than £10k in a year and 2500miles. Crazy.
blindswelledrat said:
Buzz Lightyear said:
But if you had a £30k Mercedes, and £6k worth of options, you wouldn't expect that used one to be worth £6k more on the used market. Lucky if it's even £1k more. Options depreciate quite badly.
I disagree, but lets find a couple of examples and see. I may as well use an XC60 as an example. Ill find two 3-yeard old ones- one basic and one specced with similar mileage and we will see.http://www.autotrader.co.uk/classified/advert/2014...
The cheapest alternative with a few extras (Quick calculation about £5k in extras)) is this one which is same age and type but twice the mileage for £3500 more.
http://www.autotrader.co.uk/classified/advert/2014...
THis genuinely wasn't me cherry picking examples to suit my argument, it was the first obvious comparison that came up.
I would agree with your point on a £20k Renault but £30k+ cars are still premium cars - a bracket containing many Audis, BMWs, Mercs, Volvos etc.
blindswelledrat said:
Buzz Lightyear said:
But if you had a £30k Mercedes, and £6k worth of options, you wouldn't expect that used one to be worth £6k more on the used market. Lucky if it's even £1k more. Options depreciate quite badly.
I disagree, but lets find a couple of examples and see. I may as well use an XC60 as an example. Ill find two 3-yeard old ones- one basic and one specced with similar mileage and we will see.It is likely that they make a bit more on well optioned cars, which could be one of the reasons they can do unoptioned ones so cheaply. Its a pretty well known sales tactic.
crosseyedlion said:
What would be the point in going to the effort? The lease companies can structure a deal how they like - if you dont like it, dont take it.
It is likely that they make a bit more on well optioned cars, which could be one of the reasons they can do unoptioned ones so cheaply. Its a pretty well known sales tactic.
As per the original question on the subject. Most lease cars are virtually or relatively option-free I believe.It is likely that they make a bit more on well optioned cars, which could be one of the reasons they can do unoptioned ones so cheaply. Its a pretty well known sales tactic.
Manufacturer margins on extras must be 80%+ at a guess.
SO it doesn't make financial sense for them to discourage people from buying extras on lease deals by effectively overcharging on what already has a huge margin.
blindswelledrat said:
crosseyedlion said:
What would be the point in going to the effort? The lease companies can structure a deal how they like - if you dont like it, dont take it.
It is likely that they make a bit more on well optioned cars, which could be one of the reasons they can do unoptioned ones so cheaply. Its a pretty well known sales tactic.
As per the original question on the subject. Most lease cars are virtually or relatively option-free I believe.It is likely that they make a bit more on well optioned cars, which could be one of the reasons they can do unoptioned ones so cheaply. Its a pretty well known sales tactic.
Manufacturer margins on extras must be 80%+ at a guess.
SO it doesn't make financial sense for them to discourage people from buying extras on lease deals by effectively overcharging on what already has a huge margin.
trying to get 3 buying decisions vs. 1 for what is fundamentally the same vehicle (same desirability)...
blindswelledrat said:
As per the original question on the subject. Most lease cars are virtually or relatively option-free I believe.
Manufacturer margins on extras must be 80%+ at a guess.
SO it doesn't make financial sense for them to discourage people from buying extras on lease deals by effectively overcharging on what already has a huge margin.
80% Manufacturer margins on extras must be 80%+ at a guess.
SO it doesn't make financial sense for them to discourage people from buying extras on lease deals by effectively overcharging on what already has a huge margin.
. I'd be amazed if it's over half that.But either way, it's not the manufacturer discouraging it, that'd be the lease company. They just don't think they'll recoup that money wen they come to sell it, or they purely don't want the hassle. All the cars will go to auction, where dealers with the CAP valuations will say the car is worth x and that's it. They just don't pay masses for options, never have done.
Yes, if you sold it privately it'd hold it's value better, or at least be easier to sell.
Just my opinion. But if you want to benefit from the higher residual values of options, you'd have to buy the car or go down as a lease purchase route instead.
I don't understand your point at all.
My over-simplified point is this:
If they lease 100 cars at 30k they make X profit.
On the extras they make 80% margin.
With current lease charges they probably lease 90 cars at 30k and 10 at 35k Making X plus 80% of 50k
If the cost of extras was halved in the lease (as per depreciation) they would sell 25 standard cars and 75 cars at £34k making their profit X plus 30% of £300k. SO not only have they made a lot more money initially, but they also have much higher value cars to sell at the end of the lease. It would be win-win for them.
My over-simplified point is this:
If they lease 100 cars at 30k they make X profit.
On the extras they make 80% margin.
With current lease charges they probably lease 90 cars at 30k and 10 at 35k Making X plus 80% of 50k
If the cost of extras was halved in the lease (as per depreciation) they would sell 25 standard cars and 75 cars at £34k making their profit X plus 30% of £300k. SO not only have they made a lot more money initially, but they also have much higher value cars to sell at the end of the lease. It would be win-win for them.
Adrian Rushmore, managing editor of Glass’s Guide, the used-car price book, says: 'As a general rule, options depreciate faster than the car. So if a car is worth 33 per cent of its value new after three years, the money you spent over that on features will be worth even less.'
EDIT: forgot to paste the link:
http://www.telegraph.co.uk/motoring/news/9131470/N...
EDIT: forgot to paste the link:
http://www.telegraph.co.uk/motoring/news/9131470/N...
Buzz Lightyear said:
80% . I'd be amazed if it's over half that.
If you are right, then this would explain a lot of it but if you look at the price of extras of any premium manufactuer I don't believe the cost to manufacturer is a fraction of the price to the customer.. I'd be amazed if it's over half that.Buzz said:
But either way, it's not the manufacturer discouraging it, that'd be the lease company. They just don't think they'll recoup that money wen they come to sell it, or they purely don't want the hassle. All the cars will go to auction, where dealers with the CAP valuations will say the car is worth x and that's it. They just don't pay masses for options, never have done.
.
On premium cars? Again, you may be right - I don't know much about this, but I would be amazed if a 3 year old BMW 5 series at auction with a reasonable amount of extras would sell for a similar aged one with cloth seats , a manual gearbox etc..
blindswelledrat said:
I don't understand your point at all.
My over-simplified point is this:
If they lease 100 cars at 30k they make X profit.
On the extras they make 80% margin.
With current lease charges they probably lease 90 cars at 30k and 10 at 35k Making X plus 80% of 50k
If the cost of extras was halved in the lease (as per depreciation) they would sell 25 standard cars and 75 cars at £34k making their profit X plus 30% of £300k. SO not only have they made a lot more money initially, but they also have much higher value cars to sell at the end of the lease. It would be win-win for them.
Even if this "80%" margin existed, it would be the manufacture getting the benefit of that, not the lease company actually funding the car.My over-simplified point is this:
If they lease 100 cars at 30k they make X profit.
On the extras they make 80% margin.
With current lease charges they probably lease 90 cars at 30k and 10 at 35k Making X plus 80% of 50k
If the cost of extras was halved in the lease (as per depreciation) they would sell 25 standard cars and 75 cars at £34k making their profit X plus 30% of £300k. SO not only have they made a lot more money initially, but they also have much higher value cars to sell at the end of the lease. It would be win-win for them.
So if I break this down using your margins. Let's say a £1000 Sat Nav. The manufacture is making £800, but the lease company is probably still paying £800-£900 for that.
They will then recharge that £800 they spent back to you, but will obviously want some profit on it as they taking an enhanced risk, as well as charging you more for interest as they're spending more to buy the car. They will then also want profit when it comes to sell the car, and as they own it, they can charge the premium for it.
As most lease companies are owned by banks, they will want low risks, large profits. If they can recharge you the whole cost of the options to you, they are minimsing risk, as well as benefit from it in interest and residual benefit.
I do agree with you that it's not right, but fully understand the business model also (and yes, I do fully appreciate if more people are paying for options, they are all making more - but it's not without risk).
Buzz said:
But either way, it's not the manufacturer discouraging it, that'd be the lease company. They just don't think they'll recoup that money wen they come to sell it, or they purely don't want the hassle. All the cars will go to auction, where dealers with the CAP valuations will say the car is worth x and that's it. They just don't pay masses for options, never have done.
.
On premium cars? Again, you may be right - I don't know much about this, but I would be amazed if a 3 year old BMW 5 series at auction with a reasonable amount of extras would sell for a similar aged one with cloth seats , a manual gearbox etc..
They don't pay that much more for options, rather just spend less for not having options - at least to a certain extent.
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