Buying at the end of a lease?

[drjhill]

Apologies if this is covered elsewhere - I am going to look once the roast is cooked

SWMBO is bending my ear about changing her car so been for a chat with a nice young man this afternoon.

Dealer is offering some incentives (deposit contribution, monkey off the sticker price, free service plan) and offered choice of cash, PCP or to my slight surprise lease (via the dealer) and then tried to baffle me with many calculations, and it was clear he favours 48m PCP (commission driven I would think)

Please let's not get into the "if you are thinking about finance you can't really afford it" malarky now, but:

If I did go for the lease and SWMBO decides that she cannot bear to think about changing it when the time is up (which would be a nice change), as a general rule how easy is it to offer to buy it from the leasing company at the end of the contract.

I "assume" that this is win:win as the lease co have a little less admin and shuffling cars to do, punter keeps the car he has spec'd from new and grown fond of etc. Do they generally work on a "trade in / part-ex" valuation?

Many thanks

[Dave Hedgehog]

It seams to me pot lot of a lease company will let you buy the car at the end, I have bought one from the lease co in the past but have been refused 3 other times

[OddCat]

drjhill said:

Dealer is offering some incentives (deposit contribution, monkey off the sticker price, free service plan)

They offered you £500 off ?

[f1nn]

It’s hard to think of reasons that it wouldn’t suit the lease company to “sell” the car to the same customer who has leased the car for the first three or four years.

it would suit everyone surely?

[NoAdverseDevelopments]

Only if the price you pay the end is more than it's value at auction. If the lease company knows they can get more for it via other channels, say it's a model in demand, then they will try and keep it.

[Firestick]

I was offered mine and after a little ringing around, it was certainly more than trade, but less than retail.

I went for a change in the end, but if I was contemplating buying used, I'd rather pay a fair price for a car I've looked after since new, rather than another I know nothing about.

[loskie]

Don't lease or PCP anything that will take you outwith the manufacturer warranty period. You will end up paying big bills to fix THEIR asset.

[Raino144]

The Corporation tax and VAT position is different for a lease than for a PCP. The rates are lower as the CIT and VAT is partially deferred. Rules are complex, would be a multi page post to try and explain.

If you take a lease there is no guarantee they will sell to you at the end (or someone you know etc.) - if you manage to achieve this then you’ve successfully double dipped the cheap rate to begin with and the subsequent purchase.

Please read the guides on here as for what method of financing is best for you - as once signed you can’t change horses part way through!

[drjhill]

Thanks for all those so far:

Can't quite remember how to multi quote so:

One incentive is dealer contribution to PCP (I'm aware that I can take this and pay off quickly after taking delivery, making it effectively money off sticker price). Monkey is indeed £500 off OTR price rather than anything to do with Mr Harris, until the end of this month. 2 services for £159 on offer, dealer says he will chuck this in for free.

Popular model?: Dealers & leasors are pushing diesel like there is no tomorrow (which for diesels there may not be) so in 3-4 years time will the petrol model be especially sought after? I have no idea, but in this segment will the dealers/leasors be especially concerned with taking back relatively unusual spec model just to teach me a lesson for not being PH enough to buy outright (from my Waitrose bag stuffed with used notes)?

If the deal was in 3-4y time split the difference somewhere between trade and retail to keep the car I have known from new and spec'd "just the way I like it" I could certainly live with that. IIRC half way through PCP you can just bail (or is it once you have paid more that 50% of total?)

There are several different models, the one closest to my ideal spec turns out to be cash or lease only, for PCP and incentives it's either spec up from base with options I like, or take more luxurious model with many features I don't need. Seems odd to me but there again I don't run a global car brand or national dealer network do I? Maybe Henry Ford was right

Warranty is extendable to 4 or 5 years for small extra cost to mitigate a risk I would probably live with anyway

All further advice gratefully considered. Thanks again

[tickedon]

Have you checked what you’d pay via Carwow? It doesn’t sound like they’ve taken that much off and Id be surprised if there isn’t more you could get...

[Wagonwheel555]

loskie said:

Don't lease or PCP anything that will take you outwith the manufacturer warranty period. You will end up paying big bills to fix THEIR asset.

MAY end up, a car doesn't magically break down once it gets to month 37. Once you get towards the end of the warranty, they will offer to extend it for a fee if you are that worried.

Im sure there is the odd horror story about a PCP/Lease car having a major issue in year 4 but ultimately I would bet the vast majority get to the end of year 4 with zero extra issues.

The benefit of a 3 year lease/PCP over 4 is the fact you likely won't need to pay for the major 36k/4 year service unless you are banging the miles on each year anyway.

[drjhill]

tickedon said:

Have you checked what you’d pay via Carwow? It doesn’t sound like they’ve taken that much off and Id be surprised if there isn’t more you could get...

As it happens, just for ballpark, yes.

Dealers line is that network is awash with diesels and I can have one tomorrow, yesterday even. If I want petrol then it's teeth sucking and "factory order" (call it 10 weeks which is fine because that's when I want the car). Manufacturer incentives end this month for delivery by the end of this year.

Handful of dealers (including the one we went to) do have a similar car unreg / delivery miles which they will discount for delivery by the end of this month. Evasive when asked how close to that same discount they will offer for a factory order.

Presume the incentive to them for upselling factory order linked to PCP is stronger than shifting a car they already have in stock.
.
Going to make a few phone calls midweek and then lace up for round two next weekend

Edited by drjhill on Monday 9th September 23:50

[Gareth1974]

Have you had a look on leasing.com https://leasing.com/ to see if the lease price being offered is competitive?