New Car Time

Thinking of opting for a personal lease as opposed to buying. Anyone any experience of leasing as opposed to buying?

 

I lease mine mate through PCP, think it's a brilliant way to get a brand new car for an affordable price. Wouldn't even look at buying a car outright now, when this one's up after 3 years I'll be getting another new one.

 

Been looking at that and agree makes the monthly amount affordable. My only concern is owing a lump at the end.

 

You don't need to owe a lump at the end. There's usually a few things at the end to do, one is get another new one, two is to either pay the lump sum with either money you may have or get a loan and the third is usually to hand it back providing the car is worth enough to cover what you owe. We have two Audi's an A3 and an A5 and it's the only way i'd ever be able to get my backside in a 37k car. What you have to realise is unless u buy the car at the end you won't have anything to show for the money u've paid unless u accept that at the start

 

Out of interest what do you pay for an A3 and what does it include,maintenance?,insurance? is it a business lease or personal

 

As I am self employed would I be able to claim the total monthly repayment against tax or only a portion of it.

 

If it's on business contract hire you can claim 50% of the monthly VAT back.

The payments can be allowed against corporation tax.

 

You don't have to owe a lump, you just take it back if you don't want it. I wouldn't bother paying x amount for a 3 year old car, I'd rather just start again on another new one.

 

I use personal lease, usually 3 payments upfront andthen 23 or 35 monthly payments after that. No lump sum at the end just simply hand it back, on my third one now. BMW 320d M Sport for £360 per month including VAT but no maintenance. Maintainence contracts prove to be expoensive really, usually at least £30 per month on top.

 

im a little old school with regards to this i think

i cant quite get my head around paying x amount per month for 3 years and having nothing to show for it at all. i know a personal lease works out cheaper per month usually and that's sometimes a key factor for some, however with this you of course never own it and have to return it with less than x miles on the clock

in my mind i think of it similar to renting a house or buying, at least if i buy a house 3 years down the line ive got something tangible that i own that despite what ive done to it i can still sell on

 

Bruce - am trying to sort something myself, so this thread is helpful. When you say "no lump sum at the end" ...... what about excess mileage etc ?
I do a lot of business miles (employed, not self employed) and some years can do over 30k miles. Thoughts ?

 

There's positives and negatives to both.

Leasing works imho if you want to drive brand new every 2/3 yrs - otherwise depreciation will bankrupt you.

 

Example, my car is worth around £13k, but I pay around £220 a month for 36 months, well it's 35 because the dealer paid the first month for me as part of our negotiation. After the 3 years I will have paid around £8k in payments, so I've had the best 3 years of the car for £8k. I can then buy the car for a value of around £6k I think, can't remember the figures tbh as I don't plan on doing it. I'll go and get another in 3 years on the same deal, so after 6 years I'd have paid £16k for 2 brand new cars. If I bought it outright at £13k I'd have a car that's 6 years old by the end of it when I'd rather have 2 brand new cars, I'd also have to pay x amount of interest as I'd need a loan to buy the bloody thing and a 6 year old car is worth naff all realistically. The difference between houses and cars is the houses go up in value whilst cars go down rapidly. I'd say if you want a car for 10 years then buy it outright, if you want a new car often then get PCP as it's the most affordable way of getting a new car, plus it's flexible so I can swap to any car at the end of the 3 years. My plan is to swap my Ibiza in for a Leon after a couple of years though if everything goes to plan, ie, I settle in my new job and get better pay so I'm fully flexible. It was a no brainer for my situation.

 

Been looking at this for my next car for the past 12 months. Nationwide vehicle contracts are the one l've opted for.

 

You've also got to take into account the fact that a brand new car won't require any repairs and it won't need to go through an MOT for the duration of the 3 years. It might not swing the decision in all situations but worth taking note of it.

 

Cheers

Its certainly a minefield. The PCP website somebody mentioned above, there seems to be a difference beween a 'PCP' arrangement and a lease one (one has the end of term IOU options.

Will look into it, need to get a job sorted first priority, car second.

My options are:
Company car
Car allowance

If I take the allowance, further options are then:
Traditional bank loan (use my old truck as a deposit)
Lease
PCP

Decision to follow ..... thanks again

 

Cheers Wellsie - so after three years, you will hand the car back. I understand that, and you will have paid about £8k. Will you have to pay any mileage fees, ie is it based on you doing 11,000 miles per year or anything ?

 

Yes, I've had to pay extra per month because I want to do extra miles. With the prices you see advertised they are based on about 6,000 miles I think, so if you are going to do more then it will cost you more. I've got 15,000 a year allowance, so if I take it back in 3 years and it has 60,000 on the clock there will be a cost for me to pay but obviously I'm going to stay within my limit.

I couldn't tell you how much I've had to pay extra for the mileage, it just gets worked into the price.

 

Following this thread with interest, my Merc will be 8 years old in November and has 110,000 on the clock. Nowt wrong with it, and I paid £29k for it, I suppose it doesn't owe me anything. It's a bit heavy on gas and I budget £200 per month to keep it going (road tax, petrol, service, tyres etc.). On your figures it wouldn't cost me that much more to lease a car that's more economical and has less tax. I don't do that many miles now.

Bottom line is: Has anyone done any research on the best company to go with on one of these deals? Or is it dealer by dealer?