Tell me about car leasing please!

[DaveGrohlsMuse]

We've always bought second hand cars and kept them until they are on their last legs. We're now in a situation where we need a bigger family car, and for a decent second hand one (also needs to be ULEZ compliant) will be about £20k.
DH has suggested we lease instead. We do just under 10k miles a year.

But I'm worried about having to keep the car in perfect condition. I will without doubt hit bollards (gently!) when parking or something similar, I know I will. Plus we have kids who play football in muddy fields most weeks so the inside of our car is pretty impossible to keep clean. Because of this I just don't think leasing is for us.
Can people tell me more?

I lease mine but I am very a clean freak with my car so it works well! The car does have to be kept in good condition and any damage would need to be repaired, you can add various things to your lease plan like alloy/tyre repairs and paint repairs though. I will be buying mine after the lease i think as I love the car and want to save some money

I lease a car and have three kids and the car is an absolute tip. I’ll just clean it when I have to send it back. It also has a rear camera to help me avoid bollards. HTH.

We got a lease car for a bit as we wanted to bigger car for kids and didn’t know what would happen in the future with electric cars etc. We have an extra maintenance plan so doesn’t matter if we scrape the car or alloys etc.

MN in general is a bit weird about not buying cars outright and you’ll get another 100 posts telling you to buy a 1998 Volvo for £200 and “run it in to the ground” as they can’t see the point in having anything more expensive but we love having a newer car, the repayments are affordable for us and it made sense in our situation

As long as you return the car clean with general wear & tear, you'll be ok. If you damage the car say curb an alloy or scratch it, that's ok. Just get it repaired before returning.

I have leased cars to all walks of customers through work including big families with 3 kids under 5. Never had any issues when returning!

Just get one with parking sensors/camera and don't scrape it. Mine has a rear camera and I always reverse park as its far easier. You'd have to repair or pay for any damage. Cleaning inside is easy just get a valet every so often.

Following this for exactly the same reasons! Need a new and bigger car, but I cannot be trusted to keep it dent free. New and nearly new cars are so expensive!!

Depends on your finances and what you like. If you plan to get a new car every three years or thereabouts then leasing is good as it avoids the money you always lose when selling the old car privately or trading it in.

If you prefer to have your car for years and just tart up scratches and dings but basically keep for longer/kill it eventually, then buying is probably better financially.
If you buy a car on credit once you have paid 50% of the payments off you can give the company the car back and nobody owes anybody anything. I think it’s the same for pcp. That may be an option if circs change.
I’ve always done a five year bank loan and kept cars till they die. After the loan is paid off I have a ‘free’ car, while my friend always has to pay the same every month for her pcp. But she has a new one every few years which is nicer than my current paid off car which is ten years old or something now.
She went over her mileage once. Was paying that back 11 months after she finished the lease and bought a new car on finance! It was awful for her as it was an unexpected cost she’d not budgeted for as she didn’t realise until she was handing the old one back, having already got a new one based on what she thought she could afford to pay monthly, so she was skint for 11 months with the extra debt.

To be paying back extra for 11 months, she must have gone massively over her mileage or there was something she isn't telling you.

As long as you are realistic about the mileage when you sign up you will be fine. It's also worth noting that it's often cheaper to pay extra mileage afterwards than paying upfront for mileage you might not use.

I had a car on PCP that was quite scruffy with quite a few scratches and dents when it went back but the man who assessed it said most of it was fair wear and tear (google the BVLRA fair wear and tear guide) and I got a bill for about £70.

Yes, it was double the mileage she thought she would do. She’s based it on the annual use of her previous car - ie short journeys undertaken in her untrustworthy banger that she hardly used. When she got the big, smooth ride of a brand new and beautiful car she was out doing everything in it and going all over the country with an attitude of ‘i will sort this out later it’ll be fine, I should just enjoy it while I can, by the time it comes to pay the bill I will have a pay rise’. I can’t blame her for enjoying the car, I love mine, but the sorting out was very dear and the pay rise didnt materialise.

That's not an unexpected cost though, that's someone being a bit dim. Not the lease company's fault.

Interesting! I've just done a bit of Googling. DH seems to think that servicing etc is included, but it looks like that would be extra.
We don't need or want a new car, but we do need one that is new enough to comply with ULEZ and I want one that is cleaner environmentally. But I hate the thought of spending hundreds a month renting something!

If, say, the clutch went or there was an fault with the engine etc, does the lease company pay? So like when you're renting a property?

Regarding maintenance it depends what different companies offer, mine was an ex demo with 1k mileage on the clock and spotless. As part of the deal I got extended warranty, maintenance and Audi breakdown cover as the car already has these. Except for 3 year warranty i think you would be expected to pay for everything else

You'll have a standard manufactures warranty which is generally 3 years of 60k miles whichever comes first. It's for mechanical and electrical faults, a clutch is a wear & tear item so you would need to fix that yourself.

Hmmm. This is becoming less and less attractive! I think DH is a bit mistaken about what is and isn't covered so it's not going to save us money like he thought it might. The MSE website also describes it as the most expensive way to "own" a car. DH is usually quite a skinflint so I doubt it's going to be his thing in reality!

I don't lease but I am on a PCP, my second one. It means I can change my cars regularly and at the end I have an option to hand the car back (like a lease), trade it in for a different one and start a new PCP or pay off the balloon and the car is mine.

It really is a great way of getting a car.

The main issue I see with leasing is that you don’t own it so at the end of the lease term, after paying X amount for a four years, you either hand back the car and have nothing or you have to pay a lump sum to keep it. But if you’ve been paying £250 or whatever to lease it, you might not have enough saved up to pay without taking more finance of some kind. My preferred option is a bank loan to buy the car outright from the dealer. It’s usually cheaper overall compared to dealer finance as well.

We are lucky enough to have the money to buy a good second hand car, so we don't need a loan. DH has it in his head that leasing will save us money, but I just don't see how that could be the case?!

Ask him to go through the numbers?

Second hand is almost certainly cheaper because you aren't paying for the initial depreciation, but there is an element of a gamble that you don't have any big repair costs eg gearbox, but that should be quite rare on a newish car.

We were in the same position as you just before Xmas - 3 kids, ulez abs a tight husband. We also have a caravan which adds to theknocks and wear and tear.

We bought outright.

The figures don't add up

It really depends on what deals are around so best to do a comparison over 3 years with the monthly payments, interest etc. It also depends if you are fussy on the car and or spec. I wanted a particular make and model so priced it up for total costs for lease, pcp or bank loan for 3 years, ( i always trade in at 3 years) and for my car the pcp option was cheaper over all, and for DH is was to lease.
I'll do that each time going forwards.
Also, lease companies do offers on particular cars, so if you are more open to the make and model, can pick up something reasonable.
With leasing and pcp, you only pay the depreciation, so more expensive cars can actually be relatively reasonable.

@itsboiledeggsagain

@itsboiledeggsagain and what did you get, out of interest?

If, say, the clutch went or there was an fault with the engine etc, does the lease company pay? So like when you're renting a property?

Generally, maintenance isn't included with leases. You can usually add it on, but it makes the monthly payment more expensive. Otherwise, it's just like any other way of having a car: if the fault is covered under the car's warranty, you don't pay. If it's wear-and-tear, you do.

It's one of those things where the headline figures can look attractive, but once you've included the leasing agent fee (which to be fair is sometimes nothing) and any extras, it can start to look less good value.

One of my brothers leased a Land Rover a few years back and when it went back the leasing company (not Land Rover, to be fair) clawed back almost two thousand pounds in 'damage'. It wasn't a bill they were expecting and it took them almost a year to pay it off. Of course, this doesn't happen to everyone but it's worth bearing in mind -- if you're not the type to keep the car absolutely pristine at all times and it gets the odd bollard bump leasing probably isn't for you.

The MSE page on car leasing is actually very good, and has lots of helpful information.

I've looked at it a few times and I can never get the numbers to add up. (I also live in centralish London so I never feel 100% confident that I'll be able to hand something back bump- and scrape-free.)

I own and run two older cars but that suits my personal circumstances, and I also do some of the maintenance myself. Of course not everyone wants to do this so it isn't the right route for other people.

How big are you talking. I got a 2yr old Peugeot 2008 for under 10k. Loads of room.

ULEZ just means Euro 4 for petrol or Euro 6 for diesel. If is it a ad-blu(?) it should a Euro 6 and therefore fine to drive in the city centre. 20k is bonkers! He just wants a brand new car!

Lease or pcp?