A different approach to PCP / Lease
Discussion
Apologies- but I am a bit of a lurker...
I must say that I find all the leasing v cash v PCP discussions quite amusing as everybody tries to justify how they are able to afford the car they are in; whilst others try to berate them- all good fun! But frankly, who cares so long as you can afford it!
Anyway, I take a slightly different approach:
I do 20-25k p.a.- of which c. 15-20k are on business.
I need a large, comfortable & efficient vehicle that also doubles as a family bus.
I admit to liking toys and am a bit of a badge-snob, although not afraid to go left field.
I am reluctant to plough loads of cash into a depreciating asset that is getting relatively high use.
Instead I see my car as a monthly overhead whereby I pay a fixed amount each month.
Historically ran company cars, before opting out and taking the cash. Since resigning and being self-employed, I have continued this policy.
I really do not see the point in sourcing something brand new- as no matter how you pay for it- there is a hell of a lot of deprecation in year 1.
So- I go down the PCP route on a nearly new / <1yo premium car that has lost 35% of its value.
I pay zero deposit; paying a fixed monthly amount based on 25k p.a. over 4 years.
I then negotiate with the dealer / dealers to get the best APR rate possible. Currently paying 4.9% on a 9 month old car at £36k- originally £56k list new.
I am not afraid to exercise my consumer rights by returning the car once 50% of the total has been paid (i.e. recent 520D MSport+ went back after 33 months of 48 month agreement at 80k miles). Admittedly, this does not sit comfortably with me- but it is my right!
I then start all over again... having just taken on a 9 month ex demo fully loaded Volvo V90 Cross-Country D5.
Although I technically 'own' part of the car, I see it as a fixed price lease arrangement but with zero deposit. Furthermore, by buying used / ex demo, I am able to choose my spec with all the toys I want, knowing that the highest rate of depreciation has already been factored in. When I then benchmark v. leases for the same car, (Best available deals specced up as mine), it works out at £200 / month amortised saving (nearly £10k over 4 years); but I then also have the option to walk away at zero cost much earlier. The only additional cost v. lease arrangement is on VED tax.
I am not saying that this is the absolute best way to run a car, but it works for me and appears to be a very cost-effective way to put relatively high miles on a decent motor.
I have never encountered anybody else doing similar- so am I missing a catch?
I must say that I find all the leasing v cash v PCP discussions quite amusing as everybody tries to justify how they are able to afford the car they are in; whilst others try to berate them- all good fun! But frankly, who cares so long as you can afford it!
Anyway, I take a slightly different approach:
I do 20-25k p.a.- of which c. 15-20k are on business.
I need a large, comfortable & efficient vehicle that also doubles as a family bus.
I admit to liking toys and am a bit of a badge-snob, although not afraid to go left field.
I am reluctant to plough loads of cash into a depreciating asset that is getting relatively high use.
Instead I see my car as a monthly overhead whereby I pay a fixed amount each month.
Historically ran company cars, before opting out and taking the cash. Since resigning and being self-employed, I have continued this policy.
I really do not see the point in sourcing something brand new- as no matter how you pay for it- there is a hell of a lot of deprecation in year 1.
So- I go down the PCP route on a nearly new / <1yo premium car that has lost 35% of its value.
I pay zero deposit; paying a fixed monthly amount based on 25k p.a. over 4 years.
I then negotiate with the dealer / dealers to get the best APR rate possible. Currently paying 4.9% on a 9 month old car at £36k- originally £56k list new.
I am not afraid to exercise my consumer rights by returning the car once 50% of the total has been paid (i.e. recent 520D MSport+ went back after 33 months of 48 month agreement at 80k miles). Admittedly, this does not sit comfortably with me- but it is my right!
I then start all over again... having just taken on a 9 month ex demo fully loaded Volvo V90 Cross-Country D5.
Although I technically 'own' part of the car, I see it as a fixed price lease arrangement but with zero deposit. Furthermore, by buying used / ex demo, I am able to choose my spec with all the toys I want, knowing that the highest rate of depreciation has already been factored in. When I then benchmark v. leases for the same car, (Best available deals specced up as mine), it works out at £200 / month amortised saving (nearly £10k over 4 years); but I then also have the option to walk away at zero cost much earlier. The only additional cost v. lease arrangement is on VED tax.
I am not saying that this is the absolute best way to run a car, but it works for me and appears to be a very cost-effective way to put relatively high miles on a decent motor.
I have never encountered anybody else doing similar- so am I missing a catch?
Having a bit of an interest in BMW man maths Im curious to know what you got for 36k at 9 months versus 54k new?
BMW freely discount but their second hand prices and pre registered prices are a complete mickey take
For example a nicely specced 335d will list at 47k and actually sell at 37.5k with a good finance rate
There are plenty of pre reg'd cars on the AUC network at not much less than 37k with no sniff of a discount and a ridiculous APR
The same holds true for Skoda
Im teeing up my next car/lease/PCP and a pre reg Superb is the same price as a new one with a worse interest rate
Cheers
JK- £580
NumTum - I went away from BMW to a Volvo V90 Cross Country D5.
Mr Barry & IPY- Not unique. Just surprised by the number of folk who go down lease route; whilst this route often appears to be a much more cost-effective and more flexible option. (OK to be fair- I thought I had hit on something- but based on 2x responses out of 5 so far- clearly I'm not the first and certainly won't be last!)
I guess that my point is that if you are prepared to out the leg-work in, it is possible to secure keen deals- even on relatively high mileage.
NumTum - I went away from BMW to a Volvo V90 Cross Country D5.
Mr Barry & IPY- Not unique. Just surprised by the number of folk who go down lease route; whilst this route often appears to be a much more cost-effective and more flexible option. (OK to be fair- I thought I had hit on something- but based on 2x responses out of 5 so far- clearly I'm not the first and certainly won't be last!)
I guess that my point is that if you are prepared to out the leg-work in, it is possible to secure keen deals- even on relatively high mileage.
Edited by Spudmaster on Wednesday 3rd January 17:40
Spudmaster said:
JK- £580
NumTum - I went away from BMW to a Volvo V90 Cross Country D5.
Mr Barry & IPY- Not unique. Just surprised by the number of folk who go down lease route; whilst this route often appears to be a much more cost-effective and more flexible option. (OK to be fair- I thought I had hit on something- but based on 2x responses out of 5 so far- clearly I'm not the first and certainly won't be last!)
I guess that my point is that if you are prepared to out the leg-work in, it is possible to secure keen deals- even on relatively high mileage.
So about £14,000 over 2 years with VED?NumTum - I went away from BMW to a Volvo V90 Cross Country D5.
Mr Barry & IPY- Not unique. Just surprised by the number of folk who go down lease route; whilst this route often appears to be a much more cost-effective and more flexible option. (OK to be fair- I thought I had hit on something- but based on 2x responses out of 5 so far- clearly I'm not the first and certainly won't be last!)
I guess that my point is that if you are prepared to out the leg-work in, it is possible to secure keen deals- even on relatively high mileage.
Edited by Spudmaster on Wednesday 3rd January 17:40
I just missed a lease for £7500 over 2 years for a £40k new car, so maybe it comes down to if you are ready to accept whatever the lease companies have a deal on vs. choosing from what other people specced second-hand, less the sqeaky-clean "new-car" feel?
Spudmaster said:
I am not afraid to exercise my consumer rights by returning the car once 50% of the total has been paid (i.e. recent 520D MSport+ went back after 33 months of 48 month agreement at 80k miles). Admittedly, this does not sit comfortably with me- but it is my right!
If you VT in theory you shouldn't have to pay excess mileage so why not take low mileage deal?P4D said:
I've read a few posts on here which claim you have to pay the excess mileage regardless?
It's unclear as you're VTing under the Consumer Credit Act and the point of it is you can hand the car back with nothing more to pay. Finance companies let it go in the past but it seems some are pushing the point now and customers are caving in so I'm not aware it's ever been tested in court.I guess you could do the same thing with straight HP (is that still available from dealers?) and there's no mileage element in that.
Mileage is pro-rata'd if you return early; with charges applying above that. I effectively had c. 500 miles in hand.
I kept the car in good order and picked up no additional charges from BMW finance either for damage beyond wear and tear. To be fair, it probably helped that I received 4x new alloys under warranty c. 3 months before it went back!
I kept the car in good order and picked up no additional charges from BMW finance either for damage beyond wear and tear. To be fair, it probably helped that I received 4x new alloys under warranty c. 3 months before it went back!
P4D said:
I've read a few posts on here which claim you have to pay the excess mileage regardless?
I don't believe this to be the case.My understanding is that with VTing, it's all about the condition (I think the word used is reasonable?) of the car and not the mileage.
This means that if you have a 4-year PCP with a 10k annual mileage allowance however you put 100k on it by the time you can VT (e.g. 40 months into the agreement) you'd still be allowed to VT without charge provided the car is in a reasonable condition for its age*.
*I'm assuming the condition assessment is based on age and not mileage.
Similarly though, if you went to VT having only put 20k on the car but it was in a terrible state, I'm sure you'd struggle to VT without a charge.
MrBarry123 said:
*I'm assuming the condition assessment is based on age and not mileage.
There's no mention of age (or mileage) in the law.It's a moot point if you're not up for a (potentially serious) fight though. However it would be worth looking at the excess mileage charge and making sure that it wouldn't be better going for a low mileage deal and paying the excess at the end.
Spudmaster said:
NumTum - I went away from BMW to a Volvo V90 Cross Country D5.
Youve done wellEdited by Spudmaster on Wednesday 3rd January 17:40
Id happily have one of these as my next car but the deals I can see at the moment arent nearly as good as yours
2017 cars all seem to be the basic CC model at only marginally less than the broker prices for new
Maybe winter keeps the demand high?
Sheepshanks said:
deeen said:
I just missed a lease for £7500 over 2 years for a £40k new car,
Not for 25K miles/yr though.I'm thinking out loud about what suits me, I guess my point for the thread is do the spreadsheet and see what works for you!
Numtum
To be fair, £36k was a very good price compared to others at similar specs.
As an ex demo, it is really well equipped with c. £14k of extras.
It was advertised on a 9.9% APR. Their initial quote came in £95?a month dearer. I told them that was too much for me, and how close could they get to my target... (My 520 payments). They came back then with a 4.9% offer- £4.5k less interest for them.
It did help that I also had an offer from AUDI on a similar age, spec and price A6 Allroad with £2k deposit contribution, 2 years free servicing and 6.9%!APR.
The point is- car sales are down, dealers need to shift metal and everything is negotiable...
Have a look on Volvo website. There are a good number of nicely specced D4s at similar money; and a good few D5s at lower prices- but minimal extras.
To be fair though, the basic spec is pretty comprehensive anyhow...
To be fair, £36k was a very good price compared to others at similar specs.
As an ex demo, it is really well equipped with c. £14k of extras.
It was advertised on a 9.9% APR. Their initial quote came in £95?a month dearer. I told them that was too much for me, and how close could they get to my target... (My 520 payments). They came back then with a 4.9% offer- £4.5k less interest for them.
It did help that I also had an offer from AUDI on a similar age, spec and price A6 Allroad with £2k deposit contribution, 2 years free servicing and 6.9%!APR.
The point is- car sales are down, dealers need to shift metal and everything is negotiable...
Have a look on Volvo website. There are a good number of nicely specced D4s at similar money; and a good few D5s at lower prices- but minimal extras.
To be fair though, the basic spec is pretty comprehensive anyhow...
Numtum
To be fair, £36k was a very good price compared to others at similar specs.
As an ex demo, it is really well equipped with c. £14k of extras.
It was advertised on a 9.9% APR. Their initial quote came in £95?a month dearer. I told them that was too much for me, and how close could they get to my target... (My 520 payments). They came back then with a 4.9% offer- £4.5k less interest for them.
It did help that I also had an offer from AUDI on a similar age, spec and price A6 Allroad with £2k deposit contribution, 2 years free servicing and 6.9%!APR.
The point is- car sales are down, dealers need to shift metal and everything is negotiable...
Have a look on Volvo website. There are a good number of nicely specced D4s at similar money; and a good few D5s at lower prices- but minimal extras.
To be fair though, the basic spec is pretty comprehensive anyhow...
To be fair, £36k was a very good price compared to others at similar specs.
As an ex demo, it is really well equipped with c. £14k of extras.
It was advertised on a 9.9% APR. Their initial quote came in £95?a month dearer. I told them that was too much for me, and how close could they get to my target... (My 520 payments). They came back then with a 4.9% offer- £4.5k less interest for them.
It did help that I also had an offer from AUDI on a similar age, spec and price A6 Allroad with £2k deposit contribution, 2 years free servicing and 6.9%!APR.
The point is- car sales are down, dealers need to shift metal and everything is negotiable...
Have a look on Volvo website. There are a good number of nicely specced D4s at similar money; and a good few D5s at lower prices- but minimal extras.
To be fair though, the basic spec is pretty comprehensive anyhow...
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