Car Leasing

[Lord Tyrion]

I have been into three dealers in my area that I have been impressed by. Audi, Mercedes and Skoda, I've not been into a Lexus dealer but their reputation is also excellent. All have been polite, respectful and most of all knowledgeable. The rest have ignored me , couldn't be bothered to find out information and had less knowledge about their cars than I had. Not knowing your product is a scandal yet I could reel off a list of dealers I've been into that glaze over when you ask them a simple question. Having knowledge creates the bond between customer and dealer. If they clearly don't know their product then what can they offer over an online site? Too many salesmen, VW is the classic up here, seem to employ people who think The Apprentice is the way forward. Not for me thanks and not for many others either.

 

[TheDiablo]

I have been into three dealers in my area that I have been impressed by. Audi, Mercedes and Skoda, I've not been into a Lexus dealer but their reputation is also excellent. All have been polite, respectful and most of all knowledgeable. The rest have ignored me , couldn't be bothered to find out information and had less knowledge about their cars than I had. Not knowing your product is a scandal yet I could reel off a list of dealers I've been into that glaze over when you ask them a simple question. Having knowledge creates the bond between customer and dealer. If they clearly don't know their product then what can they offer over an online site? Too many salesmen, VW is the classic up here, seem to employ people who think The Apprentice is the way forward. Not for me thanks and not for many others either.

Made me lol as from my experience its absolutely spot on, but I didnt have the words to describe it! Unfortunately the Mrs had her heart set on a Polo, luckily there are a few dealers round this way so found the best of a bad bunch

 

[markyjee]

Looking into leasing for the first time, on the quotes I'm getting the companies are recommending "gap insurance".
Do the people who have experience of leasing normally take this or see it as a way of the companies trying to squeeze a little bit more profit?
Is their an option when taking out my car insurance to have this covered?
Cheers

 

[Lord Tyrion]

Not essential and I have never taken it. Maybe a friendly dealer who posts on this site 💑 could explain the benefits?

 

[Blue in Munich]

Looking into leasing for the first time, on the quotes I'm getting the companies are recommending "gap insurance".
Do the people who have experience of leasing normally take this or see it as a way of the companies trying to squeeze a little bit more profit?
Is their an option when taking out my car insurance to have this covered?
Cheers

I've taken GAP insurance before, although not on a lease car. Basically it should cover the difference between what you will owe on finance and what you receive for the car from your insurance company if it is totalled. Be interested to see what they quoted you as I was offered it by the dealer when I bought the current motorcycle, declined it from him & took it out independently for considerably less money.

 

[KenL]

Shop around for GAP insurance as it may well be more expensive from the dealer.

The biggest rip off is the offer of a sealant for hundreds of pounds that is a total waste of time.

 

[full_throttle]

ALA for Gap Insurance, i got mine for less than £1 a week over 4 years, it's not essential but give peace of mind that should your car be written off you don't loose out financially when replacing like for like

 

[markyjee]

Cheers guys, looking at a 2 year deal, 2 companies have given me quotes, one doesn't charge fees was £200, other charges £199 fees and quoted £150.

 

[Smiffy]

I've taken GAP insurance before, although not on a lease car. Basically it should cover the difference between what you will owe on finance and what you receive for the car from your insurance company if it is totalled. Be interested to see what they quoted you as I was offered it by the dealer when I bought the current motorcycle, declined it from him & took it out independently for considerably less money.

Pointless taking out GAP insurance on a lease car. As the car is registered in the finance companies name, they are the ones that would benefit.

 

[Deleted member 18588]

Looking into leasing for the first time, on the quotes I'm getting the companies are recommending "gap insurance".
Do the people who have experience of leasing normally take this or see it as a way of the companies trying to squeeze a little bit more profit?
Is their an option when taking out my car insurance to have this covered?
Cheers

Are you talking about leasing or PCP.

If leasing then no point in Gap Insurance. However, if PCP then it is generally advisable but recommend you shop around.

 

[Aztecs27]

Are you talking about leasing or PCP.

If leasing then no point in Gap Insurance. However, if PCP then it is generally advisable but recommend you shop around.

Can someone, in layman's terms, explain what GAP insurance is/does?

 

[Deleted member 18588]

Can someone, in layman's terms, explain what GAP insurance is/does?

See BiM's post #125.

As a lease deal does not involve you in anything other than leasing the "use" of the vehicle and there is no option to complete a purchase at the end of the term and thus there is not a figure owed during the term there is no gap between the value of the vehicle and any amount "owed".

 

[Aztecs27]

See BiM's post #125.

As a lease deal does not involve you in anything other than leasing the "use" of the vehicle and there is no option to complete a purchase at the end of the term and thus there is not a figure owed during the term there is no gap between the value of the vehicle and any amount "owed".

Ah! might look at taking some out then.

 

[Val]

I have 2 cars in the family, 1 on PCP where gap insurance was encouraged due to liability in the event of theft or write off. The other is leased where gap insurance wasn't even mentioned.

Says it all if you ask me.

 

[Smiffy]

Can someone, in layman's terms, explain what GAP insurance is/does?

Most companies now offer a combination GAP/RTI policy.
GAP was/is for finance customers, RTI was/is for cash customers.
What happens now is that if you take out a combination policy, the payout will be the one that is more beneficial to the policy holder at the time of the "incident".
If you owed more on finance than the actual price of the car (as you would do VERY early into a finance agreement if you had only put a small deposit down) the policy will pay out under GAP.
If, on the other hand, you were well into your finance agreement and it would be more beneficial for you to be paid out under the RTI (return to invoice) side of things, that's what you would get.
Basically, if you paid £25,000.00 for the car and your insurance company agreed to pay you £15,000.00 write off value, the RTI insurance would pay you the other £10,000.00 to give you back all the money you paid in the first place.
But the benefit, in all instances, is that if you were to write your car off, you just phone the RTI/GAP insurance company and they will deal with your insurance compay, taking a lot of the hassle away.
Whatever you do, don't get involved with the insurance company yourself with regards payout. The RTI/GAP insurance company will go ballistic, and may in fact refuse to pay out.

And just to repeat. If you are LEASING your car, there is absolutely not benefit to you in taking out GAP/RTI cover.
If you are buying on a PCP or other form of finance where you "effectively" own the car I would recommend it.

 

[Aztecs27]

Most companies now offer a combination GAP/RTI policy.
GAP was/is for finance customers, RTI was/is for cash customers.
What happens now is that if you take out a combination policy, the payout will be the one that is more beneficial to the policy holder at the time of the "incident".
If you owed more on finance than the actual price of the car (as you would do VERY early into a finance agreement if you had only put a small deposit down) the policy will pay out under GAP.
If, on the other hand, you were well into your finance agreement and it would be more beneficial for you to be paid out under the RTI (return to invoice) side of things, that's what you would get.
Basically, if you paid £25,000.00 for the car and your insurance company agreed to pay you £15,000.00 write off value, the RTI insurance would pay you the other £10,000.00 to give you back all the money you paid in the first place.
But the benefit, in all instances, is that if you were to write your car off, you just phone the RTI/GAP insurance company and they will deal with your insurance compay, taking a lot of the hassle away.
Whatever you do, don't get involved with the insurance company yourself with regards payout. The RTI/GAP insurance company will go ballistic, and may in fact refuse to pay out.

And just to repeat. If you are LEASING your car, there is absolutely not benefit to you in taking out GAP/RTI cover.
If you are buying on a PCP or other form of finance where you "effectively" own the car I would recommend it.

Cheers Rob! Most helpful. :thup:

 

[vkurup]

Question for Smiffy and others who work in dealership. Am trying to compare two PCP deals. These are for 2 different cars so the quotes are not like for like. How is the residual value of the car determined? In the past another dealer has "managed" the residual value to achieve a certain monthly figure for us. One of the dealers we are dealing with has said that the residual value is determined by the finance company and therefore cannot change.
1) So who sets the residual value?
2) At the end of the contract, the car could be worth less or more. If the market value is more then, I can trade it in. But if the market value is less, can get the difference back? #cheeky :rofl:

 

[Smiffy]

Question for Smiffy and others who work in dealership. Am trying to compare two PCP deals. These are for 2 different cars so the quotes are not like for like. How is the residual value of the car determined? In the past another dealer has "managed" the residual value to achieve a certain monthly figure for us. One of the dealers we are dealing with has said that the residual value is determined by the finance company and therefore cannot change.
1) So who sets the residual value?
2) At the end of the contract, the car could be worth less or more. If the market value is more then, I can trade it in. But if the market value is less, can get the difference back? #cheeky :rofl:

The residual value is set by the finance company. They are the ones that are guaranteeing the value subject to mileage, condition etc.
The final figure can be manipulated "down" by the salesman to get to a figure that is acceptable to the customer (they might (might)) want to pay more a month and not have so much at the end, but on a true PCP the end figure cannot be inflated.
You normally have 3 options at the end of the agreement.
1) Pay the end figure and keep the car
2) Trade the car in, and anything you get over and above the optional final payment would go as desposit on your new car.
3) Hand the car in and walk away with nothing further to pay apart from excess mileage charges or for damage over and above what could be construed as fair wear and tear.
You could of course sell the car and keep anything over and above the final payment still owing, but trying to sell a 3 year old car privately is always a bit of a gamble.

 

[Aztecs27]

The residual value is set by the finance company. They are the ones that are guaranteeing the value subject to mileage, condition etc.
The final figure can be manipulated "down" by the salesman to get to a figure that is acceptable to the customer (they might (might)) want to pay more a month and not have so much at the end, but on a true PCP the end figure cannot be inflated.
You normally have 3 options at the end of the agreement.
1) Pay the end figure and keep the car
2) Trade the car in, and anything you get over and above the optional final payment would go as desposit on your new car.
3) Hand the car in and walk away with nothing further to pay apart from excess mileage charges or for damage over and above what could be construed as fair wear and tear.
You could of course sell the car and keep anything over and above the final payment still owing, but trying to sell a 3 year old car privately is always a bit of a gamble.

Should be noted that depending on the manufacturer/finance company, the guaranteed future value may be set relatively conservatively (or not)...(correct me if I'm wrong here Rob!)

From what I can gather, based on quotes we were given for comparison and looking at residual values for models that are 3 years old - Mercedes GFV is absolutely appalling, and you won't have much chance of having any equity in the car. Honda's seemed quite competitive, and the one we got for our NX was about 16k - so unless we rag the nuts off it and cover a lot more than our contracted mileage, I would like to think we'd have equity in the NX to trade in after 3 years.

There's also always the option of trading up early, which can be useful when newer models are released or promotions are run (lower interest rates etc).

 

[Smiffy]

There's also always the option of trading up early, which can be useful when newer models are released or promotions are run (lower interest rates etc).

Not always easy when you are on a PCP.
Not only will you have the final payment to consider, but also possibly 12 months of payments too (if you tried to trade in after 24 months of a 3 year deal for instance).