Lease cars....

[Stressballs]

Lots of people I know seem to drive around in high end cars which are disproportionate to their earnings and every few years they seem to be upgrading to an even bigger/better car. DP and I are car hunting at the moment and I mentioned to DP that I had always been rather intrigued as to how other people earning far less than us managed to afford these executive cars (when we are driving around in a modest little hatchback!) and DP was saying that barely anyone actually buys cars anywmore and they all lease them instead. Not sure where I’ve been but I had no idea!

Is it really that common now?! I’m struggling to see what the financial benefit is as surely since you never own the car it’s an endless cycle of monthly fees to be left with nothing at the end and having to do it all over again. Or perhaps it’s just for the staus of having a showy car. Am I missing something?!

How are you all getting no deposit options?

We want an Alhambra and they want a £3,700 deposit plus £312 a month. If I had £4K I wouldn’t be looking to lease!

Usually you can decide how much deposit you put down Georgie, but the lower the deposit the higher the monthly payment.

Here you can get an Alhambra on a 3+35 for £282 (total cost £10,716) but if you go up to 12+35 you can have it for £246 per month (£11,562).

What does 3+ mean? Also what's the initial rental of over £1.5k? Is that not a deposit?

Sorry to butt in

I’ve looked at that website and isn’t it asking for £2900 up front as well?

I’m with you gekiort!

Yes they are both payable, that’s works out at double the advertised hire price

Many reasons we leased ours instead of buying...

• could afford a newer and safer car this way
• scrappage scheme gave us £4000 for our old car (when it was knackered and actually worth about £500) against the cost of the new car
• no MOT etc to worry about
• no surprise repair bills. We had a lot of those with our old “run it into the ground” car though!

We didn’t care about it being “flashy”, or gadgets etc, but just wanted a safe, decent sized family car that was reliable. Leasing is Great IMO.

3+35 means that the deposit will be equal to 3 months rentals - the only additional fee with that is normally an admin fee somewhere around £200ish.

So this www.nationwidevehiclecontracts.co.uk/Seat_Alhambra-2-0-tdi-cr-ecomotive-s-150-65728.htm if you set the bits at the side to contract length 36, initial rental to 3 then you should get a payment of £304.74 with initial payment of £914 + £198

That one was the diesel - here's the petrol at £255

leasing.com/independent-brokers/jet-vehicle-finance/seat/alhambra/317307233/

People keep saying that lease cars are more reliable, my last Ford Fiesta which I had from when it was a year old to 8 years old was very reliable, I expect my now 2 year old Fiesta to be reliable. Just because I paid upfront does not make it unreliable.

If I could guarantee that a car I bought outright would be reliable then of course I'd buy one.

The last three I've bought have been complete money pits. Thousands and thousands of dollars in repair bills, despite me having had them inspected before I bought them.

I'd love to know what magic people have that guarantees that every car they buy never needs any repairs in the many years they run them.

sc doesn’t that mean you don’t pay monthly payments for the first 3/6/9/12 because you’ve paid the deposit?

How can a lease over three years be less than the depreciation on the same car over three years if you got it new?

Easy. The lease company pays a much lower price for the car from eg ford than you would because they buy in bulk, and like others have said if you can catch a model change or similar you can save thousands over buying the same car from a dealer.

Our current car is £252 a month for three years with three months up front deposit.

That’s taxed, all set using and all consumables like tyres etc.10,000 pa limit.

To buy new the best price I could get from a dealer was £39k, but I found a lease company who had just purchased hundreds of the same models and went with the colour and options they had in stock

I don’t know why these sites aren’t better at explaining how it all works. I think they genuinely try to confuse people.

No Georgiethecat, that's how they define the upfront/deposit. You don't then not make payments.

So if you took a 3+35 now, then my last couple have worked like this:

• you'd pay the acceptance fee upfront (that's normally the £200ish fee)

-say the car got delivered next week (if you go for an in stock) then you'd probably pay the first rental (equal to 3 normal rentals) a week or two later. This timing might vary, I have a feeling DH's was paid before delivery but I would need to double check -then a month (ish) after that you start paying your regular monthly rental on your agreed payment date.

You can get 1+ deals where the first payment is just the same as the others, but they can work out a bit pricier overall.

Ok as I thought then, completely out of our price range! Thanks!

I have a Nissan Leaf EV on PCP.
The monthly cost is about the same as I spent on petrol and tax for my old car...never mind depreciation.
I don't think I'd go back to "owning" a car as I would still have to borrow the money to buy it so it wouldn't make financial sense.

If you want to say what you are after (7 seater I presume, any other requirements?) and what's manageable upfront/monthly I can have a wee look for deals if it would be helpful.

I think my 09 Fiesta I traded in just needed brake pads and tyres above the normal servicing and mot, so nothing big just a couple of hundred quids worth, it was due a cam belt change and more brake pads though so I traded it in and got a one year old, it was time for it to go.

DH's SUV sometimes need repairs but not a lot, a lease car would be no good to him though as you have to keep them looking nice and set the mileage, he prefers to know he's paid for the car, not worry about every scratch, also he puts different tyres on his vehicles for off road and stuff like that

I lease but only because I need a reliable car and can't afford £20k upfront in one go! We have had older cars in the past which have been fine but I spend so much time ferrying my three round it is nice to have a decent car to do it in!

Thanks Statistically. Sorry Georgie I should have explained better.

When I got my last lease I paid the £200 booking fee which goes to the broker I think. Then I paid the deposit of 3 months (approx. £650 for me) when I received he car and then the following month the direct debit for the regular monthly fee kicked in and I'll pay 35 of these regular monthly payments.

I agree with Statistically - if it doesn't have to be an Alhambra you might be able to find a good deal. I don't know much about 7 seaters though - are there any others you like the look of?

Sorry to put a downer on what everyone appears to think is a great system, but ecologically, this is a really bad way of 'owning' a car. If the % of people buying cars in this way is 80%, and most change their car after the 3 year lease period is up, what then happens to the hundreds of thousands of second hand cars then flooding the market? No-one wants to buy a second hand car, because they can have a brand spanking new one without the upfront outlay.

There is also some suggestion that PCP may be the next financial bubble to burst:

Bloomberg

guardian

We have a Kia, bought when it was about 12 months old, ex demonstrator with less than 3,000 miles on clock - dealer bumped the warranty back up to the original 7 years, so we had what was basically a brand new car for £4K less than new price which has been going strong for 9 years.

Any idea where that 80% number comes from? Just thinking about the various people I know and I struggle to see it being correct without there being a whole bunch of extra caveats!

In terms of the next financial bubble; I'd say it's possible, yes. It is quite different to the situation with sub-prime mortgages though from a consumer perspective as the risk attached is quite different. The payment is fixed for the term of the agreement, and the consumer has either no exposure (in a lease) or upside only exposure (in a PCP) to second hand car prices. That's very different to mortgages where if the arse falls out of the housing market the individual borrowers end up in trouble - they can't remortgage due to falling house prices and too high LTV so get stuck on standard rate which they can't pay even if they could afford the original mortgage just fine.

Most of a car's depreciation happens when you drive it out of the showroom - it used to be that it roughly halved in value, though that's probably changed now. But cars are so well built that they should run for years... I don't understand why anyone buys a new car unless they're really "into" cars.

My first car cost £2000; it was 6 years old when I bought it. It ran without any major problems for over 12 years - in that time I had 1 new exhaust and 1 new battery to pay for. Passed MOT every year with no trouble. Best of all, I could bump it off walls and lampposts and not worry too much!

Second-hand cars are definitely the way to go if you want to save money!

Our last car depreciated by £8k in a year. When it comes to eventually needing a new one, I’m going I lease as you’d spend less and have a new car which would be under warranty, not need much maintenance etc.

Oh and just to add, our car wasn’t brand new, it was 4 years old.