Car lease and money arrangements - what to do?

[VixforVictory]

Our household has 3 cars at the moment: my cheap 'run around' which is worth £2,500 (no outstanding finance), and DH's two cars which are worth £9,000 (fully paid off) and £4,5000 (or thereabouts, but still has a lease of £4,000 outstanding). The second car was involved in an accident and has only just been fully repaired. DH is two months behind with the payments, and his proposal is that we sell my car and use the lease car for all the driving (specially long distance as he does a lot of miles) thus retaining the value of the expensive car. I have two concerns: 1) although my car is only cheap, it’s fully paid and I there was a desperate moment, I could sell it to raise some extra cash (and it’s mine!) whereas if we go ahead with the arrangement, I potentially have a more valuable car with £2,000 finance to pay; 2) I am concerned about DH’s ability to manage his money and how we are going to meet the repayments once we’ve used up the money from my car, plus the cost of running the lease car (not with fuel but maintenance, etc). Advice?

Please

Doesn't the leased car have an annual mileage allowance, whereby you pay a supplement per mile if you go over a certain annual mileage? These charges can be very variable, but could be a significant penalty.

If your finances are separate and you're questioning his ability to manage his money, then I'd hang on to your car and suggest he chooses between the two he has. Why does he need/want two cars if he can't afford the lease costs?

I would always go for a second hand paid off car over a leased car. The leased car will cost you far more in the long run. Get rid of the leased car or else it'll keep hemorrhaging money.

Check what penalties apply before trying to get rid of the lease car. It is not usually easy to get out of one.

You also need to get your DH to sort his money out properly or else you will end up with debt/bank charges/ruined credit rating etc which makes everything difficult and more expensive in the long run.

Thank you all! So far, I have kept my finances 100% separate from his and it has only just come to light that he's in a financial mess, to be honest. His proposal seems to make some sense as far as retaining the value of the better car goes, but I don't want to put the money from my little car into it and find myself with nothing but £1,500 worth of debt to show for it.

Why lease one car when your buying another?
Keep your car, its paid for, send the lease back and sort out the other cars payments.
Cars aren't worth anything as are houses unless your selling them. They are tools. The shiny more expensive tool doesn't necessarily do a better job.

The car was already on lease and DH kept so that his eldest son could use it. If we send the lease car back, we have two cars which are both fully paid but DH will have to continue using his car for long-distance trips which is quickly depreciating its value (his mileage is very high at the moment). Otherwise, we will have two better cars but ca. £1,500 lease payments and higher running expenses to sort out.

Thank you! My questions may sound naïve but I've never been tempted to lease a car.

According to DH, it's a hire purchase so you can end the agreement after it has gone a half term and walk away with nothing owing or coming back on you. He also says that because of this, the mileage isn't an issue either as it's not the same as an annual mileage contract.

Yes, sorry, he kept referring to it as a lease but it's a hire purchase...lease?!?!

There are different types of purchase plans, but basically you pay a deposit and a monthly rental and also a lump sum at the end if you want to keep the car. None of these are cheap options, of course. There's no inexpensive way to buy a car on credit. You can walk away from the deal, but you'll have paid a hefty lump of cash over and have nothing to show for it. A better way would be to take out a low interest bank loan to cover the cost of the car. Then it's yours at the end of the term.

If your DH has two cars, one to keep and look after and the other to hammer the mileage and then hand back, he'll be throwing money away. He has servicing, insurance and tax costs on top of the monthly payments too. Better to have one good, reliable car and look after it and sell it when the mileage reaches 70-80,000 and start again.

He means "halves and thirds", if it's do-able it'll be in his finance documents under voluntary termination.

When they pick them up they asess the car for damage, excess mileage, lost spare keys and will charge you for it. Even if it's not damaged they'll try it on, it's happened to fil and he would've paid if it hadn't have been for Dh (who is motor trade).

DO NOT SELL YOUR CAR. It's yours to keep.

If he's in a mess he has to sort it out, cars depreciate every single day, That's just the reality of the product.

Unless you buy a limited edition Ferrari and keep it unused for 50 years you will lose money on them.