• New Patreon Tier and Early Access Content available. If you would like to support AVForums, we now have a new Patreon Tier which gives you access to selected news, reviews and articles before they are available to the public. Read more.

New car - lease / hire?

mr:w

Well-known Member
My wife and I both have a car, both of which are around 7/8 years old and both have recently needed some pretty pricey services.

Our circumstances have changed recently and we can easily get by on one car. The idea is to sell both cars, bank the cash and / or use it as a deposit or payments on a lease car.

We'd switch to another new car at the end of the term, hopefully avoiding the loss incurred through purchase, or the costs associated with maintaining & servicing an older car.

Does anyone else 'own' a car though personal leasing? Is personal leasing rather than to a company actually possible? Is leasing worthwhile, or do other methods of ownership make more sense, ie. PCP, personal loan to purchase outright? What are the recommended lease companies?

Cars we've been looking at are Audi A4, Lexus IS 250 etc.

Apologies for sounding so vague, our cars over the last 12 years have been private purchases so we're not too clued up on what's the best approach, and I'm not too trusting of any car sales people..... :blush:
 

FZR400RRSP

Banned
My wife's car is leased.
It can be a very cheap way to get yourself into a new car.
For example, my wife's top-of-the-range Fiesta only costs me £200 a month.
Couldn't hope to buy a new one for that, not unless we had a massive deposit or a loan over umpteen years.
Roadtax is also included.
Lings Cars was our first port of call, but they had none left.
However, they put us in touch with another lease company who did the deal at more or less the same cost as Lings.
I can't recall their name, but it would be a moot point anyway as they were bought over by someone else whose name escapes me.
 
Last edited:

lmccauley

Well-known Member
Generally, the cheapest (as in the lowest overall cost) way to own a decent car is to buy privately when about 3 years old and sell privately after about 3 years. Depreciation is usually the biggest cost of ownership, and buying & selling through a dealer means you pay for their margin.

Leasing has the benefit of owning a brand new car, and some good deals are available where the leasing company buys in bulk to get a discount. Also, you don't have the hassle of selling privately - you just hand back.
 

mr:w

Well-known Member
FZR400RRSP, thanks for the info. Did you need to pay any lump sum or deposit upfront or just jump straight in with the monthly payments? And how does it work at the end of the contract - simply hand the keys back?

Also are there limits on your mileage, and do you cover all servicing costs?
 

FZR400RRSP

Banned
FZR400RRSP, thanks for the info. Did you need to pay any lump sum or deposit upfront or just jump straight in with the monthly payments? And how does it work at the end of the contract - simply hand the keys back?
Also are there limits on your mileage, and do you cover all servicing costs?

Usual term is 3+35 months.
That means you pay 3 months up front, then 35 monthly payments.
Yes, you just hand it back at the end of the contract.
Yes, agreed limits are set up at the start of contract and your monthly payments are based on that.
For example, a 6k per year lease will be cheaper than a 10k per year lease.
Ours is 10k a year.
If you go over that it's something like 4p a mile, so even another 1000 miles will only cost £40.00.
Yes, servicing is down to us.
 

un1eash

Distinguished Member
Some lease hires can include servicing at an extra cost so its worth checking to see if it works out cheaper.
 

FZR400RRSP

Banned
Some lease hires can include servicing at an extra cost so its worth checking to see if it works out cheaper.

No harm checking, but unless you do massive mileage full maintenance contracts rarely work out in your favour.
Plus they can be very restrictive, where you're only allowed to go to their chosen suppliers and have their choice of tyre fitted.
My Audi A4 ended up with 4 different Pirellis on each corner, because of full maintenance.
Not something I'd do myself.
 

mr:w

Well-known Member
Useful info everyone, thankyou.

Does anyone have any recommendations for good lease companies I should look at? A quick google search throws back hundreds......
 

FZR400RRSP

Banned
Useful info everyone, thankyou.
Does anyone have any recommendations for good lease companies I should look at? A quick google search throws back hundreds......

Lings Cars is always my first point of call.
Mad website :eek:, but her reputation for service is great.
I also get emails from Nationwide Vehicle Contracts, and they have some appealing deals.
 

paulk

Active Member
I've looked into leasing recently and found Lings expensive on the cars I was looking at (Merc C220 Sports 125's). I was recommended to a broker who deals direct with the manufacturers corporate lease departments and they were (in October) about £100 a month cheaper than Lings for the same car.

You can get private lease or company. The final prices are the same so it just depends whether its any benefit from a VAT perspective on a business lease(you can claim 50% VAT per month back).
Whatever broker you go through - you will normally pay one payment to them and then everything else to the company leasing the car to you. (Eg. For Mercs that WIll be Mercedez Benz Corporate).

FZR's point about lease deals being 3+35 is spot on - so watch out for some deals that appear better monthly costs but are more upfront (Eg 6 + 35). Consider the total layout over the term.

Mileage wise most companies quote 10k per annum, but increasing that to 15k is only a small monthly increase. Excess mileage charges differ (Eg. BMW 6p, Merc 9p) but are not overly expensive.

Personally I've always bough my cars ex dem or 18 months old to avoid depreciation so never looked into lease deals until recently. If you want peace of mind of a new car with full warranty and fixed payments then lease is ideal. You also have no hassle of GVF (Guaranteed Future Value) or selling in 3 years time you just hand back. Shop around and you should be able to lease a car for 2 or 3 years and pay less than the depreciation over the same period as there are some fantastic deals at the moment.

The Merc C220 deals I was quoted were £6,000 less (over 36 months) than BMW and Merc PCP deals which required much more ££ upfront.

Factor in GAP insurance (£150 to £200 for policy) to cover worst case scenario if you want peace of mind (covers any shortfall between cars value and insurers pay out for total loss).
 

metal.mark

Active Member
Recently done a similar thing gone from two cars down to one, taken out a personal lease on a Citroen C3 vtr+ Went direct through Citroen leasing as they offered a better deal over 2 yrs. Includes the tax,AA recovery, and 10,000 miles per year could of taken out a service agreement as well but as it only needs servicing every 2 years not really worth it.Had to put £500 deposit then 23 monthly payments.
 

Desmo

Distinguished Member
My only concern with leasing is if your circumstances change financially and if in a few years time you can't afford that lease and you're also now left without a car. I know this is different for everyone, but it's something worth thinking about :)
 

FZR400RRSP

Banned
Desmo said:
My only concern with leasing is if your circumstances change financially and if in a few years time you can't afford that lease and you're also now left without a car. I know this is different for everyone, but it's something worth thinking about :)

Surely that goes for most people, lease or not?
Most have a monthly cost for their car, which may mean it having to go if their financial status changes.
No-one I know has a paid-off car that costs them nothing a month.
 

Desmo

Distinguished Member
But at times you can hang on, pay of the remaining balance and then get to keep the car. I've been there before in the past when I had a car loan and work took a turn for the worse. I kept plugging away and paid off the car which I could then keep forever if I needed to and the money became freed up for other things. Had it been a lease car, I'd have finished the payments to free up the money but also been without a car.

Like I said, it's different for everyone but I still thinks its worth mentioning :)
 

FZR400RRSP

Banned
It's also worth mentioning that it doesn't always cost you to hand a lease car back early.
If, for example, you are under the expected mileage they may take the car back early without penalty.
This happened with my last leased BMW.
I'd only done 25000 of the expected 36000, so it didn't cost a bean to put it back 6 months early.
I intend to try this soon with the wife's fiesta, as it's only done 15000 miles with 8 months to go on a 30000 contract.
 

paulk

Active Member
But at times you can hang on, pay of the remaining balance and then get to keep the car.

Yes, but you are paying twice as much to get yourself in that position where you could own the car which is a much bigger financial committment.
With a loan you will be paying much higher £ monthly payments as you are paying against the total cost of the car.
With PCP you will have big deposit and higher monthly payments and then require a lump sum or re-finance to cover the GFV if you intend to keep the car.

If you are worried about being able to pay the monthly payments over a two or three year term then lease (for a new car) or buying a cheaper second hand car (thats already depreciated so lower loan payments) would be cheaper options over 2-3 years.

Lease companies do have arrangements for either paying lease off or moving to a cheaper vehicle if you wish to reduce payments during the term - but you would need to ask specifically about that before signing up and they will obviously not be in your favour financially at point of change.
 

roxyskinflint

Active Member
im thinking of doing this too, im in a position now for the wife to have a car of her own and she will probably get the newer safer car as she will do most of the driving with the little one in...

leasing does seem the best option if you plan on changing ever few years
 

Desmo

Distinguished Member
paulk said:
If you are worried about being able to pay the monthly payments over a two or three year term then lease (for a new car) or buying a cheaper second hand car (thats already depreciated so lower loan payments) would be cheaper options over 2-3 years.
I don't think it's about worrying if you can make the payment for just the 2-3 years, but past that. With a normal purchase you always know there's a point you can jump off the train and still have a car at the end of it should circumstances dictate it necessary. With a lease you can jump off and be left with nothing.

I've nothing against leasing, I may even do it myself one day if it suits, I just think its something worth mentioning.
 

metal.mark

Active Member
If your not worried about actually owning the car at the end of the term then why not lease. New car every 2/3 years , full manufactures warranty, no large deposit, no depreciation to consider, no mot bills if buying something that falls into that bracket, and road tax is usually included albeit built into the monthly payment.
 

Desmo

Distinguished Member
Yep, couldn't agree with more with that :)
 

paulk

Active Member
I don't think it's about worrying if you can make the payment for just the 2-3 years, but past that. With a normal purchase you always know there's a point you can jump off the train and still have a car at the end of it should circumstances dictate it necessary. With a lease you can jump off and be left with nothing.
I've nothing against leasing, I may even do it myself one day if it suits, I just think its something worth mentioning.

If you are not worried about making lease payments for 2-3 years then you have no problems with paying a lease though so don't need to 'jump off the train'?
That said, you can terminate or alter a lease before the end of the contract. Like a loan or PCP there would be a financial cost/penalties involved though.
As for being left with no car at the end of the lease - thats one of the reasons for taking a lease out surely. You don't want to be left with a big chunk of money pay (GFV/balloon) in three years or a second hand car just out of warranty to sell.

If you are buying a car (loan outright or PCP/balloon) you can't just stop payments part way through the term and still keep the car. You either hand it back at significant financial cost or re-finance. There is no cost free way to 'jump off the train' when purchasing a car outright by way of finance.

If you want a car at the end of the 3 years then lease is simply not an option and is not worth considering. You need to be looking at the more expensive loan or PCP with balloon route.
 

NewBeetle

Distinguished Member
I bought my current car on Hire Purchase, which is never really advertised much in deals these days but suited me down to the ground as I had a large deposit (50-60%). Another good thing about HP was the interest rates were much lower than the PCP and if I am in the position to pay it off early, then it's actually cheaper than the total of remaining credit. It's a real minefield out there, with so many different options on how to fund a new car, I wanted the simplicity of a straight repayment without the worry of any final payments, much like a lease I guess other than my deposit has paid for me to keep the car at the end of the term.
 

The latest video from AVForums

Guardians of the Galaxy Xmas Special, Strange World, Bones and All, and Cabinet of Dr Caligari in 4K
Subscribe to our YouTube channel

Full fat HDMI teeshirts

Support AVForums with Patreon

Top Bottom