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[SIR Philbutt]

Looking at replacing swmbo's car soon and she has mentioned a few work colleagues have lease/purchase their cars.

Basically a new(ish) car, with all costs thrown in except insurance

Anyone got any experience of this? pro's & con's? any other info?

Ta
Phil

[Stemo]

Looking at replacing swmbo's car soon and she has mentioned a few work colleagues have lease/purchase their cars.

Basically a new(ish) car, with all costs thrown in except insurance

Anyone got any experience of this? pro's & con's? any other info?

Ta
Phil

I've been looking at new BMW 116's and merc A class for wifey. Low deposit and around £250 a month, then hand them back after 3 or 4 years. Sounds expensive at first, but no mot to worry about, under warranty of course so no repairs and you can get a cheap servicing package.

[Stemo]

Only thing that concerned me, and I haven't checked it out yet, is the insurance payout should the car be written off. Would I have to take out gap insurance as well? The payout would definitely not cover what the leaser would want.

[05omegav6]

Cheapest way to buy a car...

Buy summat tidy for £500-1000 with a years tickect on it. Put away £500 a month, less is ok, but will add another car or two to the equation.
Next year, either continue running the same car if it has proven to be reliable, or buy another cheapy. Continue putting away £500 each month. Repeat as required.

Two years will see you in a brand new runabout.
Three will see you in an decent family car.
Four years and you're into posher cars.
Five years and over will see you in a brand new Eclass/Jag XF/5Series.

Be patient and commited, and you'll have no finance on the vehicle, and cash is always a good negotiating point

If you have a small stash under the mattress, then you've a head start

[martin42]

Total waste of money ....

[05omegav6]

Total waste of money ....

Hence my suggestion

[Andy B]

Total waste of money ....

Hence my suggestion

it works for many though. Quite a few at work have a car using some kind of lease arrangement ............. I can't get my head around never owing it, but each to their own. Some would never own a 10+ yr old gas guzzler, but other's here own more than one 

[aaronjb]

I'm definitely coming round to the idea.. mainly because I'm sick and tired of the car(s) forever being broken - if it's leased and it brakes someone else has to fix it..

[the alarming man]

I was thinking about but as Al said it is a waste as if you did as Al states and save the contract costs you will save in know time...thing with me is also the mileage restrictions....I cannot keep within them and if you go over it may be cheaper to buy the car

[Andy B]

.... - if it's leased and it brakes someone ...

All cars slow down 

[Andy B]

I was thinking about but as Al said it is a waste as if you did as Al states and save the contract costs you will save in know time...thing with me is also the mileage restrictions....I cannot keep within them and if you go over it may be cheaper to buy the car

Not for you then ...... it might/does suit others 

[the alarming man]

I don't doubt suits some ,but for me you are paying for something you will never own

[Andy B]

......

it works for many though. Quite a few at work have a car using some kind of lease arrangement ............. I can't get my head around never owing it, but each to their own. Some would never own a 10+ yr old gas guzzler, but other's here own more than one 

I don't doubt suits some ,but for me you are paying for something you will never own

 

[X30XE]

Two years will see you in a brand new runabout.
Three will see you in an decent family car.
Four years and you're into posher cars.
Five years and over will see you in a brand new Eclass/Jag XF/5Series.

....
6 Years - Get cancer / get hit by a bus / [insert other life variable]
6.00001 Years - Get in coffin
6.00002 Years - Sit on cloud behind pearly gates with head in hands thinking "why did I spend my life driving round in a £500 car I didn't even like just to save money. FFS"

I'll have whatever he's smoking.  Unbelievable.


Main problem with leasing is excess mileage charges. If you don't use all the miles you're overpaying. If you go over you rapidly start overpaying. 

[aaronjb]

.... - if it's leased and it brakes someone ...

All cars slow down 

Bah, you know what I mean.. I blame my spelling on being in a bad mood after discovering the BMW needs yet more expensive parts.

[Sir Tigger KC]

Two years will see you in a brand new runabout.
Three will see you in an decent family car.
Four years and you're into posher cars.
Five years and over will see you in a brand new Eclass/Jag XF/5Series.

....
6 Years - Get cancer / get hit by a bus / [insert other life variable]
6.00001 Years - Get in coffin
6.00002 Years - Sit on cloud behind pearly gates with head in hands thinking "why did I spend my life driving round in a £500 car I didn't even like just to save money. FFS"

I'll have whatever he's smoking.  Unbelievable.


Main problem with leasing is excess mileage charges. If you don't use all the miles you're overpaying. If you go over you rapidly start overpaying. 

Well you're a cheerful sod!! 

[Andy B]

.... - if it's leased and it brakes someone ...

All cars slow down 

Bah, you know what I mean.. I blame my spelling on being in a bad mood after discovering the BMW needs yet more expensive parts.

What's up with it?

[omega3000]

Never owning it puts a lot off , old school . But seems to be increasing amount of new cars on our roads all on the knock no doubt  Amazing how many new £100k Land Rover's on the roads round here in a recession 

[aaronjb]

.... - if it's leased and it brakes someone ...

All cars slow down 

Bah, you know what I mean.. I blame my spelling on being in a bad mood after discovering the BMW needs yet more expensive parts.

What's up with it?

The electric pusher fan has packed up so it overheats in traffic or if the A/C is on (pusher fan is in front of the condenser and provides aux engine cooling).  Of course, in BMWs infinite wisdom the speed controller is part of the fan assembly and mounted in the airflow (I presume it gets 'kin 'ot and needs cooling) - and you can only buy them as a complete unit; $480 list in the US

Cheaper for a no-name Chinese knock-off, of course...

[SIR Philbutt]

Thanks for the input but to expand a little.

She has had a cheapo(ish) Scenic Fiji for 3 years and wants to get something better this time.

Thinking of getting something small and cheap to run/tax for around 5k, Aygo/C1 or 500 or the like but not many available at that price
She only does about 5k miles a year and to make things worse she wants to stay with an auto

Working around a £200 per month lease that would be a new (or almost) car for 24 month for 5k but with the money staying in our account.

For that amount/month we could get a 3 month down + 36 month contract

But not sure if it is a good idea and would like to know if there is any good/bad experiences out there ?

[Kevin Wood]

.. but you'll have paid 5K over 2 years and end up with nothing to show for it. A brand new car won't cost a great deal to maintain for the first 2 years. In fact, given the mileage, it won't need tyres, will probably still be on original brakes and, unless it's a total lemon, won't need anything repairing. You'll be paying 5K for the loan of a car plus a couple of oil changes and maybe a set of wiper blades. No doubt, at the end of the lease, they'll find a couple of scratches on it and charge you extra as a result.

If you choose carefully, a new car won't depreciate by anything like 5K in 2 years, and, if you bought it instead, servicing costs would be minimal.

These deals play on peoples' fears of unexpected repair costs and so on, but the reality is, you're paying a fortune whether it breaks down or not. If you absolutely have to either know that your motoring costs are fixed at £200 a month, or have a brand new car ion the driveway to keep up with the Jones' then fine. If not, you're better off buying, even if you have to settle for something used but relatively new IMHO. The lease companies are making handsome money out of the deal, of course.

[05omegav6]

You're stuck with the car... better off either paying cash or using the +3 as an HP deposit

Leasing a car you pay for:
a deposit + vat
depreciation + vat
interest + vat
excess mileage at 40 ppm + vat

And after all that, you still pay for servicing, insurance etc and you don't even own it and if your circumstances change, you're forced to pay the contract in full to end... with an HP agreement you only need to pay half of it to end it, no mileage charges either

[05omegav6]

This might help...

https://www.daveramsey.com/index.cfm?event=askdave/&intContentItemId=10367

 

[Andy B]

....
She only does about 5k miles a year and to make things worse she wants to stay with an auto.....

Similar to my wife, though I doubt she even manages 5k miles/yr

Her 'new' car is a 60 plate C3 with 20k miles on the clock and was a smidgen over £7000

[tunnie]

Just having a years ticket on it for say a ~£750 motor does not mean it will last a year, if you are handy with spanners then its ok.

But then there is the time to fix it, will you always have it? Would the Mrs want a 10 year old car? Children, again, would she want them in a car that old? It has more chance of failing, would you want the Mrs to have a car fail on the M4?

Peace of mind with new car in knowing it *should* be more reliable, less likely to fail and be safer in a crash.

Not saying I would do it, but is it a waste, not really it depends on your priorities. Is it expensive way? Yes very!

I personally would take out say a 8k loan for 3 years, at a reasonable APR looking at say £240/£250 over 3 years. Least that way at the end of it you own the car and 8k would get you a decent motor 

[05omegav6]

No, no and no...
A bank loan is as bad as leasing. The only way to finance a car is with an Hp agreement.

Stitch yourself up with a bank loan and if the car's written off then you're still stuck with the payments. At least if everything goes tits up with Hp then you're only luable for the first half of it...

[pscocoa]

I do agree with Tunnie on this. You see lots of deals around with low rate interest and low deposit for pretty new cars. Push the seller on extended warranties as well - so aim at 2 year balance of MFRS warranty plus 2 years additional.

[Andy B]

No, no and no...
A bank loan is as bad as leasing. The only way to finance a car is with an Hp agreement.

Stitch yourself up with a bank loan and if the car's written off then you're still stuck with the payments. At least if everything goes tits up with Hp then you're only luable for the first half of it...

but there's always the insurance payout if it is written off .............. I know that's likely to be another story though 

[tunnie]

No, no and no...

In your opinion 

Not everyone would want to drive around in a £1k banger for couple of years to save up 

Insurance would cover most of the loan, if you write of a HP loan car and it's your fault, you are still in a world of pain.

[tunnie]

I do agree with Tunnie on this. You see lots of deals around with low rate interest and low deposit for pretty new cars. Push the seller on extended warranties as well - so aim at 2 year balance of MFRS warranty plus 2 years additional.

Yup, makes sense. Maybe looking at this for the future as 8k to 10k gets you something half decent. 

[ronnyd]

My daughter has just acquired a new Merc SLK with steel folding roof for the paltry sum of £158 a month.

[tunnie]

My daughter has just acquired a new Merc SLK with steel folding roof for the paltry sum of £158 a month.

That's a super low cost, friend/family discount?

[05omegav6]

How much deposit/final payment? Guessing around £5k/£12k respectively...

[YZ250]

If you buy old cars you will feel that it is a total waste of money.

If you buy new cars, then leasing may suit you. I know from my own experience that I'm financially better off over a five year period leasing, but then both of my Omega's cost over £20K each just to purchase, as they were both only a few months old when I bought them. Our other cars, purchase prices in excess of £46K each, cost £2K less to lease over the five year period than the financed one, but you do walk away with nothing at the end of it.
Omega Elite No.1 was around £22K to buy, kept for five years and then chopped in for another nearly new Omega 3.2 Elite. I got around £2K trade in as part exchange. The finance cycle started again so, after another five years, I owned a car that was worth peanuts and I was about £42K lighter over the ten year period.  I still own Omega No.2 so it now costs very little, so it is not worth getting rid off. All of the figures above were plus the usual running costs.

By comparison, the lease car was, no deposit, no tax, no insurance, no nothing. All you had to do was stick fuel in it. It was changed annually, with each one having a purchase price in excess of £46K, and I was about £2K better off over a five year period. But, you do have to look after them, which is not a problem for me, and you do walk away with nothing at the end of it.

So, for someone like me, who buys new or nearly new cars, there is not much in it, but for someone who buys cars a few years old, it will break your heart knowing that a large sum of money is being taken off you each month. 

Should add that this was through a car company scheme, not a High Street garage. 
 

[Sir Tigger KC]

No, no and no...
A bank loan is as bad as leasing. The only way to finance a car is with an Hp agreement.

Stitch yourself up with a bank loan and if the car's written off then you're still stuck with the payments. At least if everything goes tits up with Hp then you're only luable for the first half of it...

Yes and no. 

Hire purchase you can hand the car back in the first half of the deal and pay half of the agreement, but once you are past the half way point you are committed to the full purchase.  Although if you want to settle early you only pay the interest up to the point that you settle. 

However, HP interest rates are generally alot higher than bank loan rates. 

[ronnyd]

My daughter has just acquired a new Merc SLK with steel folding roof for the paltry sum of £158 a month.

That's a super low cost, friend/family discount?

She has just informed me that it was on their business account, sorry

[05omegav6]

No, no and no...
A bank loan is as bad as leasing. The only way to finance a car is with an Hp agreement.

Stitch yourself up with a bank loan and if the car's written off then you're still stuck with the payments. At least if everything goes tits up with Hp then you're only luable for the first half of it...

Yes and no. 

Hire purchase you can hand the car back in the first half of the deal and pay half of the agreement, but once you are past the half way point you are committed to the full purchase.  Although if you want to settle early you only pay the interest up to the point that you settle. 

However, HP interest rates are generally alot higher than bank loan rates. 

That depends... currently have two agreements, one HP and one bank loan. Both for similar amounts over the same term. One costs me £444 a month, tother, £284.

Would you care to guess which is which

[tunnie]

No, no and no...
A bank loan is as bad as leasing. The only way to finance a car is with an Hp agreement.

Stitch yourself up with a bank loan and if the car's written off then you're still stuck with the payments. At least if everything goes tits up with Hp then you're only luable for the first half of it...

Yes and no. 

Hire purchase you can hand the car back in the first half of the deal and pay half of the agreement, but once you are past the half way point you are committed to the full purchase.  Although if you want to settle early you only pay the interest up to the point that you settle. 

However, HP interest rates are generally alot higher than bank loan rates. 

That depends... currently have two agreements, one HP and one bank loan. Both for similar amounts over the same term. One costs me £444 a month, tother, £284.

Would you care to guess which is which

But what are the interest rates?

[05omegav6]

18% vs 7.9% iirc...

[Andy B]

....
Omega Elite No.1 was around £22K to buy,  .....

  Wow! That's a lot of money ..... just think what £22k would buy you in the second hand market today 

[tunnie]

18% vs 7.9% iirc...

So HP 18% and loan 7.9?

[YZ250]

....
Omega Elite No.1 was around £22K to buy,  .....

  Wow! That's a lot of money ..... just think what £22k would buy you in the second hand market today 

I couldn't believe just how much money I lost on the first one, so I did it again five years later, just to make sure. 

[05omegav6]

18% vs 7.9% iirc...

So HP 18% and loan 7.9?

Guess again

[Andy B]

.....
I couldn't believe just how much money I lost on the first one, so I did it again five years later, just to make sure. 

  and you were right?!?! 

[tunnie]

18% vs 7.9% iirc...

So HP 18% and loan 7.9?

Guess again

Other way around then, but still that HP loan APR is about twice as much as a good loan. Sub 5% should be easy enough to find with a good credit rating.

As for that 18% 

Someone saw you coming, use Vaseline did they? 

[Andy B]

.... Sub 5% should be easy enough to find with a good credit rating. ....

Found one!  http://www.tescobank.com/loans/index.html 

[tunnie]

.... Sub 5% should be easy enough to find with a good credit rating. ....

Found one!  http://www.tescobank.com/loans/index.html 

Not hard   

Sainsbury do a 4.4% so not far off half the price of a HP 

[05omegav6]

Mock all you like...

I'll have you know my credit score is over 985

Had someone sat me down 18 years ago and explained why I should save up to buy my first car rather than borrow to buy it, then I might now be paying off my mortgage... as it is not everyone gets to take home £2500 a month for watching telly all week

[tunnie]

Mock all you like...

I'll have you know my credit score is over 985

Had someone sat me down 18 years ago and explained why I should save up to buy my first car rather than borrow to buy it, then I might now be paying off my mortgage... as it is not everyone gets to take home £2500 a month for watching telly all week

Is that good or bad, I have no idea 

[05omegav6]

0 is shit, 1000 is spot on

[05omegav6]

No, no and no...
A bank loan is as bad as leasing. The only way to finance a car is with an Hp agreement.

Stitch yourself up with a bank loan and if the car's written off then you're still stuck with the payments. At least if everything goes tits up with Hp then you're only luable for the first half of it...

Yes and no. 

Hire purchase you can hand the car back in the first half of the deal and pay half of the agreement, but once you are past the half way point you are committed to the full purchase.  Although if you want to settle early you only pay the interest up to the point that you settle. 

However, HP interest rates are generally alot higher than bank loan rates. 

Arse backwards Sir Tig

To hand the car back early without penalty, you must have made at least half the payments/paid the equivalent of half the payments (not quite the same thing)... eg a 48 month agreement with £200 monthly repayments. To end it early, you need to have made either 24 payments of £200 (£4800), or say you're four months in, then 4 x £200 + £4000 (£4800)

[Sir Tigger KC]

No, no and no...
A bank loan is as bad as leasing. The only way to finance a car is with an Hp agreement.

Stitch yourself up with a bank loan and if the car's written off then you're still stuck with the payments. At least if everything goes tits up with Hp then you're only luable for the first half of it...

Yes and no. 

Hire purchase you can hand the car back in the first half of the deal and pay half of the agreement, but once you are past the half way point you are committed to the full purchase.  Although if you want to settle early you only pay the interest up to the point that you settle. 

However, HP interest rates are generally alot higher than bank loan rates. 

Arse backwards Sir Tig

To hand the car back early without penalty, you must have made at least half the payments/paid the equivalent of half the payments (not quite the same thing)... eg a 48 month agreement with £200 monthly repayments. To end it early, you need to have made either 24 payments of £200 (£4800), or say you're four months in, then 4 x £200 + £4000 (£4800)

Yep you're right Al sorry.    and I used to work for a car leasing company too......   


.... about 20 years ago. 

[Andy B]

...then I might now be paying off my mortgage...  .....

Mine's paid off ......... and there are two cars outside courtesy of Tesco 

They might soon be joined with the charred remains of a Smart 

[Andy B]

......

I'll have you know my credit score is over 985
 .....

No idea what mine is ........... 

[Sir Tigger KC]

......

I'll have you know my credit score is over 985
 .....

No idea what mine is ........... 

Mine used to be in the high 900's but I expect it's in the low 000's now!   

[Vamps]

0 is shit, 1000 is spot on

But I thought 999 was the highest, if not I must try harder......

[05omegav6]

0 is shit, 1000 is spot on

But I thought 999 was the highest, if not I must try harder......

[aaronjb]

They might soon be joined with the charred remains of a Smart 

I'll stick the M3 next to it when you do it ..

[Andy B]

They might soon be joined with the charred remains of a Smart 

I'll stick the M3 next to it when you do it ..

I'll give you a bell & you can bring the matches. Just spent a couple of hours trying stuff on the Smart - removed & checked the SAM ... main brain & fuse box ... for water etc, nothing obvious, new key rf receiver & no joy. It's getting closer & closer to BBQ time for it