Car Leasing

[john0]

Hi,

Im just after a little bit of advice from anyone who works in the Car Leasing industry, or has any experience of it.

The Mrs is currently learning to drive and when/if she eventually passes her test she will no doubt be wanting a little run around. Nothing flash, just a little 1.0 with 5 doors to get the kids back and for to school and go to shops etc. Will only be running about town so mileage wont be high.

Now im thinking of going down the Care leasing route for her, as as I understand it the only costs on top of the lease will be the insurance and petrol - is this correct? Any repairs, new tyres etc will all be taken care of by the leasing company?

What are the pro's and con's of leasing, are there any hidden pitfalls that I need to look out for?

Cheers for any advice

 

[Lord Tyrion]

The type of lease is down to you. Some include maintenance, others leave it out. At our work we leave it out as the extra costs per month outweigh what we actually spend on servicing, maintenance etc.

Check that they know you are not a business and so VAT is included. You don't want a nasty shock.

Think carefully about the amount of mileage your wife will do. The lower the mileage the lower the quote. The longer the term the lower the quote as well. The penalties for going over your allowance are usually not that great so don't worry about going tight on your mileage when getting quotes.

One of the joys of leasing is that costs are worked out in mysterious ways, often mfrs use leasing to get their cars into the market. That means you can get cars that you would normally not be able to afford. For example I am leasing a Volvo XC60 at a price that defies its list price. Some mfrs push lease cars, others are less favourable. My advice there is to keep your options open as they may surprise you.

When getting quotes ask them to list the extras separately. You can then decide whether each of those options is really worth it.

Personally I love leasing. No hassle, no horrible salesman. You have the car for a period and hand the keys back. No worries about trade in, no salesman humming and telling you you have the wrong model. Test drive the cars you like, fire off enquiries to various leasing companies and sit back. Happy days.

Edit - One other point. A method companies do to keep the monthly cost low is to charge a larger upfront cost. I favour the 3 months up front option followed by monthly payments rather than 6 months upfront which is what the sneakier companies do to make the monthly cost lower. Be aware of the upfront cost before you get too excited by the monthly price.

 

[Alex1975]

^^ Sound advice.

We do not lease cars but I have worked in leasing for many years. Mostly very high value stuff.

Be aware of the profile. Car leasing companies like to try and hide things within the profile. An example is a profile that is 6+35 and lets say the rental is £100 to keep in tidy. They are asking for £600 up front followed by 35 monthly payments of £100. Another company may use a 3+33 so 3 payments up front followed by 33 payments of x. Be aware that you are not always comparing like for like and request the profile the suites you. As soon as you start to talk about profile they will be less likely to try and confuse you.

We dont get our cars with service included. You are going to have it 3 years and in that time it wont need much servicing. In this case we are paying for fuel, tires and any servicing.

Keep you (their) car in good conditions, they will want to find every stone chip or cracked headlight at the end of the term and charge you!!

Feel free to use me as a sound board as you go if its useful.

Even if the advert says 6+35 or whatever, they will change the profile to fit you, just ask them!

 

[Lord Tyrion]

Alex - You spotted the bit I missed about the profile. I added it whilst you replied but you explained it better than I did. Good advice and your reasoning behind not including servicing is the same as mine.

 

[Alex1975]

Alex - You spotted the bit I missed about the profile. I added it whilst you replied but you explained it better than I did. Good advice and your reasoning behind not including servicing is the same as mine.

All good!

Oh ye and:

Pros: You always have a lovely new car... drive the wheels off it! You do not have to deal with the depreciation.

Cons: You never own it on a lease rental.

This is just one way to finance a vehicle. You can Lease Purchase it (HP) where you will pay for the car over a longer term and pay a balloon payment at the end to own it. There are some others too. What we are talking about is contract hire or lease rental.

Tip: Get lots of options, they may for example insist on metallic paint and give it to you for free as both things make the car worth more at the end of the term. Push for the options at cost and let them know you know that it makes the residual value higher. Get at least two identical quotes and play them off against one another.

 

[john0]

Cheers guys, some real sound advice there.

Obviously need to wait for the Mrs to pass her test first, which in theory could be years, but once she is close to doing so I will deffo start to looking closely into leasing (might give you a shout at the time Alex).

Are there any leasing company's in particular that are good to deal with, or any that maybe I should stay well clear of (maybe PM me the bad ones if you dont want to post them on here).

The only downside of leasing is it means that she will have a brand new car where as I'm driving about in my 6 year old one! Maybe I should get the leased one and buy her an old banger (one old banger for another )

Thanks

 

[Alex1975]

I like these guys as they are pretty clear...

https://www.nationwidevehiclecontracts.co.uk/?gclid=CLPHn9LBtcgCFQUOwwodUZ4BWw

 

[GG26]

It would be worth considering PCP deals. At the end of my deal I have three options:

1. Hand the car back with no additional costs as long as its not damaged or exceeded the agreed mileage
2. Buy the car for a price agreed at the outset (in my case the price is likely to be considerably lower than its value at that point)
3. Take out a new contract. Where the value of the car is greater than the price at 2 above they will give me the difference towards an upfront payment, which will reduce the monthly payments.

This gives some flexibility as circumstances may change over the 2 -4 years of the contract.

Different manufacturers do different deals. The one I got had a £1,500 deposit contribution and the repayments were based on 0% finance. There was only a £100 deposit upfront.