Leasing instead of buying ? Worth It ?
Discussion
Just been sent quotes on a Sagaris & T350c from a leasing company, so spent a little time looking into it.
The basis of the quote was personal contract hire, 24 months, fully maintained, 18,000 miles per annum.
Now this mileage is pretty much exactly what I do in the T350c.
Having looked at the costs of my T350c, they are as follows:
Paid £ 37,000
Servicing in last 16 months around £ 2500
Tyres around £ 900
Clutch £ 1000
General bits & bobs £ 500
Taking into account if I sold the T350 now I would probably be looking at around £ 27,000, then thats another £ 10,000 lost.
So, in total, to run my T350c for 16 months has cost me:
£ 10,000 depreciation
£ 8,800 finance payments
£ 5,000 deposit
£ 5,000 servicing
I probably have about £ 5,000 equity in the car so less this, and:
TOTAL: £ 23,700 in 16 months, which is £ 1,481 per month.
Now, the quotes I got were as follows:
T350c - £ 963.00 per month
Sagaris - £ 1135.00 per month
These include full maintenance, 3 x 23 payments, and are inclusive of VAT.
Not quite sure buying a new one outright makes sense anymore.
The basis of the quote was personal contract hire, 24 months, fully maintained, 18,000 miles per annum.
Now this mileage is pretty much exactly what I do in the T350c.
Having looked at the costs of my T350c, they are as follows:
Paid £ 37,000
Servicing in last 16 months around £ 2500
Tyres around £ 900
Clutch £ 1000
General bits & bobs £ 500
Taking into account if I sold the T350 now I would probably be looking at around £ 27,000, then thats another £ 10,000 lost.
So, in total, to run my T350c for 16 months has cost me:
£ 10,000 depreciation
£ 8,800 finance payments
£ 5,000 deposit
£ 5,000 servicing
I probably have about £ 5,000 equity in the car so less this, and:
TOTAL: £ 23,700 in 16 months, which is £ 1,481 per month.
Now, the quotes I got were as follows:
T350c - £ 963.00 per month
Sagaris - £ 1135.00 per month
These include full maintenance, 3 x 23 payments, and are inclusive of VAT.
Not quite sure buying a new one outright makes sense anymore.
Oh, don't get me wrong I understand the different ways of funding vehicles. I run my own company, but have we asked, always been advised against putting them through the company.
It wasn't until yesterday, when the clutch on the T350 packed up, that I acutally starting thinking how much it has cost to run for 16 months.
Residuals kill short term purchases (obviously). The 10k I have lost in depreciation on the car alone is £625.00 per month.
I was just thinking that the leasing quotes I recieved, where you get a brand new car to your spec, don't have anything to worry about for 2 years, i.e no servicing/tyres, etc, and then just hand it back in 2 years time & walk away, seem good value.
Obviously I also understand that the bulk of the depreciation has now been done, and if I kept the car another 12 months it would probably only loose another 3 or 4k in that time.
Anyone buying these cars expects to loose money. Same with any sports cars, however if you can minimise it well I'm all for that.
It wasn't until yesterday, when the clutch on the T350 packed up, that I acutally starting thinking how much it has cost to run for 16 months.
Residuals kill short term purchases (obviously). The 10k I have lost in depreciation on the car alone is £625.00 per month.
I was just thinking that the leasing quotes I recieved, where you get a brand new car to your spec, don't have anything to worry about for 2 years, i.e no servicing/tyres, etc, and then just hand it back in 2 years time & walk away, seem good value.
Obviously I also understand that the bulk of the depreciation has now been done, and if I kept the car another 12 months it would probably only loose another 3 or 4k in that time.
Anyone buying these cars expects to loose money. Same with any sports cars, however if you can minimise it well I'm all for that.
Yes I know what you mean, one thing I discovered recently was that if you have a vehicle registered in the name of your business and that vehicle had an Accident, all VAT on the repairs and hire cars has to be paid by the business.
Obviously I can claim that back at the end of the next VAT quarter, but although the accident wasn't my fault I was left with a bill of about £1,000 to pay that wasn't budgeted for and one that my business will have fund until I can claim back.
I won't register another car in the name of my business.
Obviously I can claim that back at the end of the next VAT quarter, but although the accident wasn't my fault I was left with a bill of about £1,000 to pay that wasn't budgeted for and one that my business will have fund until I can claim back.
I won't register another car in the name of my business.
alloypearltam said:
Yes I know what you mean, one thing I discovered recently was that if you have a vehicle registered in the name of your business and that vehicle had an Accident, all VAT on the repairs and hire cars has to be paid by the business.
Obviously I can claim that back at the end of the next VAT quarter, but although the accident wasn't my fault I was left with a bill of about £1,000 to pay that wasn't budgeted for and one that my business will have fund until I can claim back.
I won't register another car in the name of my business.
This is a valid point, but you do not have to pay it at the time! If you never pay it the Dealer will claim it back from the CE. Another way is to insure the car personally and claim the premiums back. That way you are not VAT registered.
Normally this single biggest issue with leasing rather than buying personally is if you want to get out of the deal early, circumstances change etc.... you never know and most lease agreements will make you pay the term out to get out of the car.
Worth checking you are happy paying that amount at anytime just incase you need out quickly.
However, getting out of a owned can can be just as painful sometimes!
Worth checking you are happy paying that amount at anytime just incase you need out quickly.
However, getting out of a owned can can be just as painful sometimes!
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