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Car lease(17 Posts)
Instead of buying. Thinking of leasing a car for 3 years. Usually take out a loan to pay for a car and when loan has finished trade in car for newer one,hence another loan. So was wondering if it's worth while leasing? Has any else on here leased? Is it worth doing?
I don't like lease car deals myself. If its a new car can you lease it for x years with the option to buy after the time, saving the money towards its purchase price? You'll know how well its looked after then. I got my car (6mths old cash) nearly 10 years ago. It works and is mine bought & paid for does it matter to you that you've got a new car?
I lease cars and I love it. Only lease a small car so payments are low. The amount I used to have to spend on repairs was ridiculous and the time I sat in a garage . Also save a lot on petrol and tax as low emissions. I will never purchase a car again. Leasing is the way forward for me
We lease, and for us it's worked out well. The amount we've paid in lease payments over the last 3 years (current leaser is about to go back) has been less than the depreciation on the car - we wouldn't have been able to but outright so if we'd bought it in another way (HP or PCP) there would also have been finance costs to factor in to that, plus the tax which is paid.
Not for everyone, but we like to drive fairly new and this has been the cheapest way to do it. New leasers already ordered which are also looking like they will work out much cheaper than buying.
If you'd buy a car and keep it til it's run in to the ground it's probably not as economical but if you like to trade in every few years anyway then it's worth checking. Current car is through Nationwide, new ones are Gateway2Lease and FleetPrices, also had good quotes from SIlverstone. There's a good thread on the PistonHeads forum with lease deals - you get the best deals if you're a bit flexible about what car and don't spec many options as you often end up paying the full price of these over the lease term. It often works out better to get a model which has the higher spec in the first place (where the residual value is therefore higher) than to get a cheaper one and add stuff on.
That's great advice thanks. I shall have a look at the companies that you have meantioned. We've always taken out loans and once repaid sold the car and took out a new loan for another car.
If you buy new and replace every three years anyway, then lease is usually better than purchase.
BUT, if you usually either buy new and keep for say 5/6 years, or buy a car that's 2/3 years old and keep it for a few years, then leasing will cost you more.
It all depends on what you do currently and what you plan to do in the future. With leasing, the car will never be yours, you'll never have anything to part exchange, so you could end up trapped leasing forever unless you could save for a replacement when the lease ends.
Leasing a small/cheap car is a good deal, because the manufacturers/finance companies incentive the cheap lease to get you hooked. When you need a bigger or better car, i.e. for a family or if you start to commute long distances, you may find you have to continue leasing (no savings or PX for a deposit or purchase a replacement) and the lease deals for better/bigger cars are a lot more expensive.
I have to say I wouldn't entirely agree with that re bigger/better cars. Our current lease car is a 7 seater Qashqai and the new ones (Golf R and a Touran) aren't especially small/cheap cars either and in each case it's worked out by far the cheapest way for us to acquire and run them over the period. But it depends entirely on the car and being flexible is important as there are many deals which aren't as good. We had some really good quotes on the new BMW 3 series PHEV and on Audis, and I also got a lease quote on a little Fiat 500 which was half the monthly payments of a PCP over the same period.
This is the kind of comparison I do when looking at the deals to work out what's decent.
Audi A4 1.4 sport
Lease (2 years at 8k) - £156 pm plus £1404 upfront - total over 2 years is £5148. For the sake of ease to compare a longer period I'm just going to double this for 4 years - longer leases are sometimes better, sometimes worse but part of the joy of leasing is being able to chop and change and take advantage of deals.
Typically, it's one of the few not listed on the Whatcar depreciation index but I've compared a couple of other similarly priced Audis, and they seem to lose about 45% over 2 years, or about 61% over 4 years. So I'll go with that for ease, it's going to be in the right ballpark. Depreciation info only runs to 4 years so that's why I've done 4!
If you finance the exact same car over 2 years through Audi directly (4.9% apr), it will cost you £28757. Over 4 years its £30135. I've kept the upfront payment the same.
Roughly (using the depreciation calculators)
Value after 2 years - £26850 (retail price) * 55% = £14767
Value after 4 years - £26850 * 39% = £10471
Lease cost after 2 years = £5148
Finance cost (bought over 2 years): £28757-£14767= £13990
Leasing after 4 years= £10256
Finance cost after 4 years= £30135-10471 = £19664
In this case the lease clearly kicks the arse of purchasing it - unless you're going to keep the car for 10+ years and then you have to start factoring in the maintenance.
There's a few of them around on the Audi just now, I think that one was through Gateway2Lease. They're basically a bit slow to get the written quotes from but fine once you get past that stage (I'm dealing with them just now)
I replaced my car last week.
Bought one with 8,000 miles on the clock for £14,000 than the first owner spent.
Financed it 2/3 through savings and 1/3 through a zopa 5 year loan that I plan to clear in a year.
I do high mileage so none of the lease deals are worth it
I'll keep this car till (a) it falls apart (b) I spot what I'd really wanted
The only thing to bear in mind is that if you lease (or in fact pay any car payments long term) on a car it does amount to a huge amount of money over a lifetime.
I just plugged a few numbers into a compound interest calculator - so if you invested in your pension/other investment instead of paying a car lease payment of £250 per month from the age of 30 to 65 you'd have £323k if it averaged 5% (fairly low interest for an investment). If it averaged 7% you'd have £504k at age 65.
With this in mind we have decided to buy fairly cheap, older but low mileage cars, save for them and pay cash and drive them for a few years, as we aren't really bothered about brand new cars.
I think my main worry when it comes to leading is that any minor paintwork scratch or alloy wheel scrape will end up costing a total fortune.......
19lottie82 most leases have conditions applied to them and your allowed some scratches on the paint and the wheels without penalties - iirc there are rules about what they can and cannot charge for. I know with Mercedes you get a template for scratches and they say you can have x amount at this size or x amount at another size. all that info is pointed out before you would sign a lease anyway.
here is a rough guide of whats allowed
I've lasted my car for almost three years (nearly at end of my term) through my company via a salary sacrifice scheme, are you able to do a similar thing. Has been brilliant. I would never have afforded a decent car prior to this.
My company have now stopped doing this so I won't be getting another one but I can now buy the car outright in July, they've taken off what I've already paid in past 3 years what I've paid to car and I am paying the remainder of the cars value. I've not had to pay tax, insurance or for any of the services etc the cars needed. Only thing I've paid for is the insurance excess when some idiot hit and run my car while parked outside a friends
Leasing suits me because I don't want the hassle of selling and buying a car. Nor do I want unexpected car repair bills. Having no experience in the mechanics of a car I am the complete mercy of the mechanic so they could be telling me anything and I would have to believe them. The additional worry of getting the car through its MOT, the huge car tax and insurance is too much. At the end of the lease I just hand the car back and don't have the additional burdon of a depreciating asset. I also have the pleasure of finally driving my dream car. What's not to like
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