Car Lease Agreements

Jon

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Has anyone on here got experience of leasing a car?

I know it's quite popular to do it at the moment (certainly a LOT of people at work seem to do it!) but I just can't seem to make the maths add up.

I've never owned a first hand car, always had a 2nd hand one which I usually spend around £4-£5k on.
Sometimes they have been great and just needed 'run of the mill' type repairs needed doing to them and other times it has completely backfired and I've had to spend £600-£800 in the first year on out of warranty repairs.

The option of buying a first hand car out right is out of the question as I just don't have the money to do that so then it comes down to looking at leasing or HPA or whatever they are called.

Basically you trade in your existing car as a deposit and you get a nice new first hand car with a monthly payment attached (usually a few hundred)

The advantage being that it's new so there is less chance for stuff to go wrong and then and it is also under warranty. At the end of the agreement say in 4 or 5 years you can choose to buy the car outright (so I assume you are then paying the full time for a car from a few years ago) or choose to swap your car for another new model and carry on paying.

You essentially never own the car I guess in the same way you bank own your house until you pay off your mortgage.

Does anyone on here own a car via HP and if so do they think it's good value for money and I'm just being dim as the main negatives I feel are that the car is never truly yours and that you are sort of stuck in a loop of endlessly getting new cars every few years.
 

Bow382

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I have always owned old cars, but I imagine that if you can afford the monthly payments then it does make sense in a way. It's like renting a house, it's never yours but if anything goes wrong you don't have to worry about expensive repair bills. You have nothing a the end of it but also less financial worries.
 

The Reverend

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I had a car on PCP. It didn't cover warranty/tyres/tax. It was very expensive for what it is and I handed it back early. I recently bought a 8 year old 320d and its been a great car.

I personally thought my plan wasn't value for money. However, I've recently found lingscars (the website makes you eyes bleed) and for lease deals it looks a beauty! there are plenty of places which will let you have a 'nice' car for £150-£200 a month (with 3 payments upfront). If its important to have a new car then a lease is great. Some leases are less than the VAT of a new car.

But you don't own it. It wont have 'earned' any money (regardless of what a sales person tells you) and it is just renting the car. I don't compare it to a mortgage it is more like rent. You are 'buying' the service of a working car for period x.
 

katykicker

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We are going to buy a 2 year old car next year, much rather just own it outright as we like to keep our outgoings low.
 

MamaMidwife

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I've looked in to it before but every time I've been in the market for a car it just doesn't make sense in comparison to buying a used car. Financially speaking that is and that's just for our financial circumstances whereas for others it makes perfect sense :)

Don't get me started on NHS car lease though, that's even worse!
 

Lizziew24

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I have a lease car. 2016 Nissan qashqai which I really like. I did a load of research beforehand re lease/PCP/loan option. My previous car was bought from what I think was a dodgy garage and was 3 years old at the time and so much went wrong with it. I was spending money every month, so I wanted a car where I felt I was safe in the knowledge things would be taken care of under the warranty/lease terms. I managed to sell this on to webuyanycar or similar for much more than it was worth and got my lease car. However, leases are often advertised cheaper than your requirements. So, they look cheap on the surface but they only allow you 8000 miles per year; when you increase this, the price massively inflates. I travel around North Yorkshire for my job, which is a big county, and I do a fair amount of miles. I admit I did get a few "extras" on my car, such as roof bars, sunroof, leather heated seats, satnav...issue with this is that although I wouldn't get a satnav next time, I love my heated seat and kids muddy footprints wipe off leather better than cloth, so I know I'll want these in future cars!! I digress.
HOWEVER.....I wish I had not done this. It's expensive and I now realise that I could have bought a 2 year old car with warranty remaining (Kia and Hyundai have 7 and 5 year respectively) using a loan for less money. My wife is looking to buy a new car at the mo and this is the route she is going down.
So, sorry for long harp on, but year old, two years, with remaining warranty is the way to go in my opinion.
 
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Jon

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I've looked in to it before but every time I've been in the market for a car it just doesn't make sense in comparison to buying a used car. Financially speaking that is and that's just for our financial circumstances whereas for others it makes perfect sense :)

Don't get me started on NHS car lease though, that's even worse!
What's NHS car lease?
 

Lizziew24

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What's NHS car lease?
I assume it's similar to the council lease scheme I have available at my work....Payment comes straight from salary so is meant to be more tax efficient but actually costs about £3000 per month for a robin reliant.
 

mabozza

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We are on our second pcp car now... i love the idea of having a brand new car for 4 years then getting another... not really having MOT issues (most newer cars nowadays start falling apart after about 5 years)... the trade off is being the owner of a car that you are stuck with when its failing MOTs every year aa its resale value plummets.. or basically hiring a car for far less money outlay (we now have a 17 plate Meriva we pay £130 odds a month for 4 years.. then take it back and walk away or get another new car on a new pcp) the only bummer is the allowed annual mileage that you take on it.. but when we took back our last one we were a couple of thousand over and had some deep scratches but never got charged for that) i wouldnt go back to buying a 2nd hand one
 

MamaMidwife

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What's NHS car lease?

Pretty much what @Lizziew24 has said. You get a brand new car but the terms of the contract are very restricted. I've spoke to a few people about it as want to get a new car when I qualify, but they've all put me off of NHS lease!
 

FreeSwagSites

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I always "contract hire" cars, but you need to be registered business and have vat number.

It is very tax efficient.

The key is to treat car use as an annual expense rather than obsess about "ownership" issues.

Not sure how it works out for non-business leases.
 

Jon

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Crikey it's a real mixed back in here..

We travel a LOT throughout the UK due to our family living in Norwich / Cheltenham / Bristol and us being oop north in Leeds. Do you think that would cause an issue with those 'mileage limits' that seem to be placed on lease cars?
 

mabozza

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You can set your own mileage limit Jon, but, the higher it is the higher your monthly payment... IIRC it's not awful, we just about doubled ours, think it was only a few quid per month more...but different dealers will have different rates
 

taffynoel

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Always owned. But motoring wise I find sensible driving is the best money saver. I can hyper mile (using every trick in the book) and get 52mpg from a fiesta ST! That's double what most get.
 

Andrew

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I do HIre Purchase for my Beamer as I bought it when it was 3 years old. Works fine and you can buy an aftermarket warranty and mot/servicing package which helps cover anything expensive going pop. I do a lot of mileage for work though so it made sense for me to do that as I don't have to worry about any excess mileage charges. Did briefly flirt with the idea of going PCP and having some nice and shiny but the idea of having to use the train to travel for work just didn't appeal (and sitting on a train means I can't stop off and do any task 360 or roamler tasks along the way!). However, the cheapest way to motor is to buy cars that have passed the depreciation limit with a long MOT and a recent service from eBay and sell them on a few months later whilst the mot has got a bit left to run and starting the cycle again. If anything goes bang in the meantime on the car you'll find loads of parts for peanuts in the local scrapyard. I did this for years before I spoiled myself with a nice nearly new Audi A3. Biggest mistake I ever made as after a few months of driving it I got cramp (I was too big for it) and had to trade it in for a loss.
 

David H

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I think car leasing is becoming very popular in the UK, as many on this thread have already said.

I know that if you Google "Lease Car" you can find many websites that offer leasing services. I have found this to be significantly cheaper than Contract Hire schemes offered by dealers and of course you are likely to get a much nicer, and possibly premium car for the same money.

The problems are of course, as others have said is that you are restricted via the amount of miles you can do, and if can be quite expensive if you go over as there are typical terms that say "6p extra per excess mile" but of course a Radio 4 programme once said that this price is exclusive of VAT.

I do a lot of driving: Norfolk to London is a typical route I do quite a lot and so I can't have one of these deals without it becoming very expensive!

I think ultimately it's dependent on preference because you can get some older cars that have done a lot of miles but are still in perfectly fine working order: there was even an Auto Express article saying to not be put off by these cars that have done hundreds of thousands of miles. They featured a VW Golf that had done in excess of 500,000 miles as it was mainly used for motorway driving, and of course many clutch changes but the car would have likely been sold very cheap and it would have lasted someone a while!

Then again, someone could definitely get one of these Lease deals and suddenly become incredibly motivated to start doing a lot of surveys! Haha!
 

David H

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I do HIre Purchase for my Beamer as I bought it when it was 3 years old. Works fine and you can buy an aftermarket warranty and mot/servicing package which helps cover anything expensive going pop. I do a lot of mileage for work though so it made sense for me to do that as I don't have to worry about any excess mileage charges. Did briefly flirt with the idea of going PCP and having some nice and shiny but the idea of having to use the train to travel for work just didn't appeal (and sitting on a train means I can't stop off and do any task 360 or roamler tasks along the way!). However, the cheapest way to motor is to buy cars that have passed the depreciation limit with a long MOT and a recent service from eBay and sell them on a few months later whilst the mot has got a bit left to run and starting the cycle again. If anything goes bang in the meantime on the car you'll find loads of parts for peanuts in the local scrapyard. I did this for years before I spoiled myself with a nice nearly new Audi A3. Biggest mistake I ever made as after a few months of driving it I got cramp (I was too big for it) and had to trade it in for a loss.

Completely agree with your post, Andrew! Didn't know that you could get aftermarket warranty!

Plus with HP you can do all the mileage you want and not have to worry about it...well, apart from fuel!

I did read recently that all new cars have lost 60% of their value after three years, so really, to buy at three years would be most prudent (like you did).
 
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Andrew

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Completely agree with your post, Andrew! Didn't know that you could get aftermarket warranty!

Plus with HP you can do all the mileage you want and not have to worry about it...well, apart from fuel!

I did read recently that all new cars have lost 60% of their value after three years, so really, to buy at three years would be most prudent (like you did).

Yep. You do have to be careful with the warranty though as some have a policy where they'll only pay a certain percentage of repair costs if your car is over a certain age or above s certain mileage. But a bit of research on the inter web can sort out the best one. They're not cheap but mine has saved me £300 this year. And if you get one they includes servicing then they'll do a proper job if use the garages they recommend cos it's in their interests to make sure nothing goes bang with the car!

I read the same thing about cars losing value. Some can be as much as 80% apparently! And every new car loses 20% of its value as soon as it's driven off the forecourt because used cars don't attract VAT but new ones don't. Also don't believe the VAT free deals that Seat and others do every January. They're legally required to charge you VAT on your purchase, all you're doing is getting the same discount that the dealer would probably have given you at any time of year! Sometimes less as well...
 

David H

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Yep. You do have to be careful with the warranty though as some have a policy where they'll only pay a certain percentage of repair costs if your car is over a certain age or above s certain mileage. But a bit of research on the inter web can sort out the best one. They're not cheap but mine has saved me £300 this year. And if you get one they includes servicing then they'll do a proper job if use the garages they recommend cos it's in their interests to make sure nothing goes bang with the car!

I read the same thing about cars losing value. Some can be as much as 80% apparently! And every new car loses 20% of its value as soon as it's driven off the forecourt because used cars don't attract VAT but new ones don't. Also don't believe the VAT free deals that Seat and others do every January. They're legally required to charge you VAT on your purchase, all you're doing is getting the same discount that the dealer would probably have given you at any time of year! Sometimes less as well...

As with anything it always helps to read the fine print, because they won't be upset if you missed a clause which states you can't claim for such and such when the time comes that you actually need to claim! Though, always quite satisfying when it's actually worth it.

I have heard this, and it's the case for certain manufacturers! The cash prices are seriously inflated to incentivise buying on PCP/HP and it just makes people go for the premium brands because the difference is often quite minimal! I have people from the Ford dealership come into where I work and they say with the likes of the "Ford Edge" and even the Mondeo: because the prices for them are very similar to the German manufactures people just won't buy them. A Ford Mondeo ten years ago used to be every other car on the road, now it's quite rare to see them at all!

I have seen the VAT deals: I agree. It's almost quite deceptive. It's similar to the car scrappage schemes all dealers have floating about, I am sure if someone were to shop around they could get similar deals or even better deals!
 
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Andrew

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As with anything it always helps to read the fine print, because they won't be upset if you missed a clause which states you can't claim for such and such when the time comes that you actually need to claim! Though, always quite satisfying when it's actually worth it.

I have heard this, and it's the case for certain manufacturers! The cash prices are seriously inflated to incentivise buying on PCP/HP and it just makes people go for the premium brands because the difference is often quite minimal! I have people from the Ford dealership come into where I work and they say with the likes of the "Ford Edge" and even the Mondeo: because the prices for them are very similar to the German manufactures people just won't buy them. A Ford Mondeo ten years ago used to be every other car on the road, now it's quite rare to see them at all!

I have seen the VAT deals: I agree. It's almost quite deceptive. It's similar to the car scrappage schemes all dealers have floating about, I am sure if someone were to shop around they could get similar deals or even better deals!

5 minutes on car wow would give them a better deal!
 
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