Car Lease – anyone doing it?

And why are you? (serious question)

Thought about it then realised I just can’t get my head round not owning it. I understand that option is available at the end of the period etc but seeing as I view cars as a tool/appliance as someone here described them I don’t see the value in leasing.

We have a Yaris and bought it cash. They only ever depreciate so figured we need to keep it a while etc but at 2.5k it makes way more sense than leasing at 150-250 a month.

I understand that option is available at the end of the period

not with a lease in its purest form, you might be confusing leasing with PCP.

I’m currently ‘renting’ my car via a PCP scheme, so an initial deposit, 23 monthly payments and then either give it back, pay a final fee and own the car, or use whatever equity is left in it as a deposit on a new car.

First time I’ve done it, I’ve always bought outright, but this time the deal was good and I figured I could make more in interest on the amount I would have had to hand over to own outright that I would pay in interest on the credit.

Its working ok for me, might not work for you, theres no right or wrong with this, but generally speaking leases/PCP’s only tend to make sense on brand new cars. If you want to buy a second hand car its usually cheaper to either pay cash, or borrow the money unsecured from your bank or another source etc.

I lease my cars. As I change them every 2-3 years it makes the most financial sense and I don’t give two hoots about not actually owning them. It all depends on the car and the deals available, but for some it is undoubtedly the most cost effective way of driving certain cars. I reckon I’ll be at least £10k better off then if I had bought my car cash at the end of the term looking at the price of used ones now, never mind the fact that the cash can be invested and earn me money in the interim.

I do. I do it as I’m not interested in owing the car as I change them anyway, leasing them means I actually do it less often. Current one is on a 3 year lease, no deposit required as it’s a monthly lease, it includes maintenance costs and insurance.

Yes. I got one of the silly cheap M135i deals that were around about a year ago. It let me have a very fast, silly (yet practical) car for a relatively short period of time for not much money. My monthly rental is less than 1% of the list price. I’ll give it back after 2 years and 20k miles knowing exactly what I spent, and no uncertainty over value (according to Glass’ it’s already depreciated far more in a year than my total payments for 2 years). My other costs will be limited to a single service and probably a set of rear tyres. I’ll only exceed the mileage if I’m doing lots for work and my 45p/mile more than covers excess mileage costs and fuel.

Arranging it was the easiest car “buying” process I’ve ever had, all done over email and the car was built to my spec and delivered to me inside 6 weeks. Very happy with the process and car itself so far.

I’d do it again. It can work very well if you’re happy with one of the models that the manufacturers (or their finance departments) are pushing at that moment, and when mine is due to go back I’ll be likely to do it again.

Yes naysayers, I could have bought a secondhand Focus or something similarly dreary instead and had the intangible satisfaction of “owning” it. I’m quite glad I didn’t.

My issue with those deals (Lease, PCP, whatever fancy marketing name they apply) is mileage and condition of vehicle.
We do @25K a year in ‘my’ work (big) car and mrs_oab’s little Yaris @10k (3x rural schools commuting). This tends to bunk up lease or pcp costs massively as they only quote for 8k miles.
We also carry canoes, bikes and three kids – and despite best efforts, the car does get mucky and more than your average wear and tear. And I do not polish it every Sunday…

Current one is on a 3 year lease, no deposit required as it’s a monthly lease, it includes maintenance costs and insurance.

so predetermined expenditure eaach month is a good thing as no unexpected bills.

I PCP my car, like the concept and works well for me.

Just need to consider a car as an expense rather than an asset.

Yep. FWIW, prior to that I had a couple of 6-month old ex-demo cars (nothing special) and before that a 3-year-old Alfa. Kept each for 2-3 years. All cost me more in depreciation and/or extra servicing & repairs than this lease will over the same term.

Most people just don’t bother to keep to track of how much their cars cost, they quickly forget big bills and only need to think about depreciation when buying the next (when “new car” excitement soothes the pain). Add it all up and it can be pretty big chunk of money.

so predetermined expenditure eaach month is a good thing as no unexpected bills.

Except ‘condition’ on return – so you do need to budget for this.

And also, according to a recent post on STW, park it a long way from any other car in supermarket car parks 🙂

tbh we PCP’d when they first came out (+15 y/o) and got very good deals as Salesmen/Dealers/Manufacturers didn’t yet fully understand them and they were ‘pushing’ them. Also went for basic/small cars so limited the expenditure.

You’ve really got to look at them as simple financing, you are just borrowing money.

Leasing doesn’t really work if you do massive miles – they’re aimed at the normal 10k per annum driver. A good rule of thumb is that if the monthly payment is less than 1% of the list price of the car it’s a good deal as most new cars lose 50% of their new price over 3 years which is 1.66% per month give or take.

Getting a Fiesta Titanium Ecobost lease car tomorrow as it happens 🙂

Through work salary sacrifice, so monthly payments come off pre-tax salary. Maintenance, insurance, breakdown etc all inclusive.

And why are you? (serious question)

Very cheap, I pay £32 / month for car inc insurance / servicing etc (Kia Picanto). Kia had some excess stock of the base model and offered a stupidly cheap deal to friends and family of employees. I was carless before, but it was too cheap to turn down.

My employer leases my 435d for me. It’s ‘my’ first lease and it seems strange to me still that i will have it for 18months and picking a new one after the first 12 months.

How do you salary sacrifice a car? Does the tax man not object? Is it not a benefit in kind? Serious question of I could I probably would!

Part of our flexible benefits package. There is some “benefit in kind” hit, but not much.

Here’s some details (this is not our scheme, just found via google as it shows an example )

http://www.leasedrive.com/pages/mycar-salary-sacrifice.aspx

How does it work if you’re self-emplyed?

Are the costs ‘allowable?’

Last I looked it appeared to work well if you were considering buying a new car and keeping it for 3 years. If you’re happy to buy prereg or up to a year old and keep it until it starts to give trouble then owning can be cheaper overall. Of course, cheaper overall won’t put you in a nice shiney <3yr old car that you otherwise wouldn’t be able to afford!

Very cheap, I pay £32 / month for car inc insurance / servicing etc (Kia Picanto).

😯

I have a pen, where do I sign?

Christ id have the kia to . Where do people get the ones with insurance included i can never seem to find them

How does it work if you’re self-emplyed?

Are the costs ‘allowable?’

Comes off your Tax Bill as it’s seen as a Business Expense.

I lease a Fiesta 1.4 tdci for £267 per month. That’s dear compared to most but it’s for a Driving School, comes with the Dual Controls and Ive a mileage allowance of 30 k per year.

Included as well is servicing and tyres which wear out, not damaged by Students.

I just leased a new Yeti on the Skoda Finance Business deal. Most of my mileage is for customers, so my (limited) company pays the monthly cost (which includes insurance, main, tyres, etc) and all the petrol. I then pay the personal mileage (back to my company if that makes sense) which I don’t do that much of as we have two cars.

It worked out a lot cheaper than buying another one. Obviously the payments are costs of sale so it reduces the tax burden, the vat on the HP is reclaimable, and the impact on personal tax isn’t bad if you pay your own juice. Did the numbers with the accountant and it’s a no brainer. I feel the same way about music, television and disk storage. I’m happy to rent it 😉

Even with 15k a year, I’m not much over the 1% a month. Sadly selling our current 3 year old Yeti did not automatically give me a massive ‘bike and other toy fund’ according to my wife 🙁 The kind of nice thing abut skoda finance (rather than going direct to a lease company) is I could still support the local Skoda garage and buy it from them.

If you want to be in brand new metal every 3 years there is no better way to do it, some amazing deals around like the M135i ones a year ago.

Thats the business model though, once they’ve got you in you are stuck in the cycle and the prices will go up for the next car up the ladder etc. You’re not likely to get out of your M135i and into a Skoda so you’ll be in a 435i paying £500!

djglover – Member
Thats the business model though, once they’ve got you in you are stuck in the cycle and the prices will go up for the next car up the ladder etc. You’re not likely to get out of your M135i and into a Skoda so you’ll be in a 435i paying £500!

Or an M5 paying…..

If you want to be in brand new metal every 3 years there is no better way to do it, some amazing deals around like the M135i ones a year ago.
Thats the business model though, once they’ve got you in you are stuck in the cycle and the prices will go up for the next car up the ladder etc. You’re not likely to get out of your M135i and into a Skoda so you’ll be in a 435i paying £500!

I wanted a Nissan GTR but Nissans aren’t an option. The car lease goes as part of my overall package. My employer was having none of the GTR talk.

The fact that I need to keep paying the lease if I lose my job is enough to stop me

Look on :

http://Www.Contracthireandleasing .com

..plus if you write it off you need to cover the list* price v what the insurer pays out..

That and car park scratches.

*The lease company may give you a sales invoice with the original agreement with this on.

I put mountain bikes near my car so not worth the hassle over scratched plastics etc.

I wanted a Nissan GTR but Nissans aren’t an option. The car lease goes as part of my overall package. My employer was having none of the GTR talk.

A fair few years ago I almost managed a Vauxhall Monero (our cars were fully expensed, and before the co2 ‘issue’ really took off), as my Director thought it was the little people carrier thing – our bloody Accountant noticed though and spilled the beans.

I wanted a Nissan GTR but Nissans aren’t an option. The car lease goes as part of my overall package. My employer was having none of the GTR talk.

A fair few years ago I almost managed a Vauxhall Monero (our cars were fully expensed, and before the co2 ‘issue’ really took off), as my Director thought it was the little people carrier thing – our bloody Accountant noticed though and spilled the beans.

🙂 I like it, what did you end up with?

I am considering doing this for my next car later in the year. Couple of questions though:

Are you restricted as to how much of a deposit you can put down i.e to keep the monthly payments lower?

Do the monthly payments increase/ decrease depending on how much milage you state?

Only ever had lease cars when someone else has been paying it for me.

Wouldn’t consider it myself as it’s just dead money.

Work colleague of mine spends £1300 a month leasing cars for both himself and his partner! £15k a year! It’s just madness.

Each to their own though i guess.

Thought about it then realised I just can’t get my head round not owning it.

They only ever depreciate

But you can get your head around dumping cash into a depreciating asset, just so that you can “own” it?

Wouldn’t consider it myself as it’s just dead money.

Lease payments are dead money.
Depreciation is dead money.

A car will cost you money no matter how you pay for it, it’s just a matter of how much. So surely the most prudent approach would be the one that costs you the least? For many, that will be leasing.

I was sorely tempted by a few of the good lease offers last year, but once I’d added on the options I wanted and was quoted for 15-20k a year, it pushed the cost up significantly.

Ended up buying a car that was a few years old instead.

I can’t imagine any situation where leasing will be cheaper than buying smartly.

If you a fixated on having a brand new car, with zero miles on the clock then fine.

I can’t imagine any situation where leasing will be cheaper than buying smartly.

I pay £32 / month for car inc insurance / servicing etc (Kia Picanto)

If you a fixated on having a brand new car, with zero miles on the clock full warranty, all inclusive costs and no surprises then fine.

FTFY

Some people don’t have the knowledge, time or crystal ball that will give them ability to see how much a used car will cost them over 3 years (because there is no way of ever really knowing), so cheap and new (in whatever flavour) is often the best for their circumstances.

chiefinspector – Member
I am considering doing this for my next car later in the year. Couple of questions though:

Are you restricted as to how much of a deposit you can put down i.e to keep the monthly payments lower?

Do the monthly payments increase/ decrease depending on how much milage you state?

Normally the deposit is 3, 6 or 9 months advance rental payments. Putting more in does lower the monthlies, but I don’t see why you’d want to do that as the total cost is the same over the period and you could stick the extra deposit into an ISA or something and earn a bit from it.

Yes mileage does affect the rentals and not always in a logical manner. On my wife’s car, the excess mileage charge is 7.2p per mile, which is less than the increased lease payment would be if we added an extra 3k miles per annum for example. To work out the best option, get a lease quote for say 10k miles per annum and then 20k miles per annum, and add the excess charge onto the 10k figure to work out the actual cost per mile for say 60k miles (total rental cost for 20k miles versus 10k miles plus the excess charge divided by total mileage)

LHS – Member
I can’t imagine any situation where leasing will be cheaper than buying smartly.

Not every decision in life should be made with an Excel spreadsheet! Much like expensive mountain bikes with XT or XTR rather than Deore, cars are often an emotional purchase. Sure I could run a 3 year old Kia diesel for much less than my new M5, but I can afford it and it makes me smile every time I drive it, so why shouldn’t I? There is no way I could run a new or nearly new M5 for anything like the cost of leasing it, but you are quite right that I could’ve boight a 520D smartly and saved money.

Just remember if you sign up for 2 or 3 years leasing on a private lease and you loose your job 4months in the lease company wont let you out. Their break clause will be all remaining months owing. I wanted rid of my lease car with 3months to go and the lease company gave me a generous 10% discount on the remaining balance 😆

I stand by my previous comments.

An M5 on a lease deal will be costing circa £35000 to lease over 3 years

A 3 year old M5 with low mileage is circa £35,000 – £40,000.

No fancy excel spreadsheet required to work that one out.