Car Lease – anyone doing it?

http://www.contracthireandleasing.com/business/car-contract-hire-and-leasing/bmw/m5/

6 up front + £600 a month over 36 months = £25,200

And it’s brand new, not three years old.

Work that out.

LHS, you do really need to add in the costs of maintaining a 3 year old M5.

LHS, you do really need to add in the costs of maintaining a 3 year old M5.

+1

Fingers crossed nothing goes wrong with the M5 between 3 and 6 years old 🙂

There is another downside to leasing if you use it for your work (and can charge mileage even if it is just back to your own contracting company), the 45p/mile (dropping to 25p after 10,000 miles) more than pays for the petrol/service/tyres etc.

It still worked out better to have a company lease tho. The other thing I noticed was when I somehow was responsible for leasing cars for a company I used to work for (now thats a thankless task!), I’m sure we weren’t paying much less per month than I would today. And that was 10+ years ago.

I always poo pooed the lease option, as it seemed like chucking money at something and having nothing to show for it.

But as time goes on, I do wonder if it would be a better option as it means that your costs are pretty much fixed and you are able to drive a nice new car.
I’ve looked at some deals here and there and am always put off by the low annual mileage and how quickly the cost seems to ramp up if you stick 25k annual mileage into the calculators.

But, it would be nice to drive around in a newer car with fixed costs. My concern would be redundancy or some other reason that I was unable to pay the car back….

My current car has been cheap to own & run. I’ve had it over 8 years and it cost me £7500. So less than £80/month in purchase cost assuming it is currently worthless.
I pay into a monthly ‘car maintenance’ pot to cover costs. This was £125 for years, but I put it up to £150 about a year ago. This covers insurance, tax, MOT, servicing, tyres etc. There have been a few larger bills that it hasn’t covered, like a new air-con compressor.

I’m realistically keeping it for another two years or so, so by the time I get rid of it, it’ll have cost me ~£65/month to pay for the actual car + about £150/month to cover all costs.

If I could find a lease deal that allowed me to drive a car for £215 or so/month and covered ALL costs I’d definitely consider it. It would have to be large enough for bike lugging duties and at least as economical as my current car (~60mpg).

6 up front + £600 a month over 36 months = £25,200

Ok, that is for only 8k miles a year but ok if your mileage is that low.

So after 3 years you would have still lost £25k.

LHS, you do really need to add in the costs of maintaining a 3 year old M5.

Not as much as you think. I have run 3 year old M5s, RS6’s and even a GT3 and it still costs a lot less than leasing.

As i said, each to their own, if you have a hardon for a brand new car then great, just IMPO you are throwing away £25k. I couldn’t bring myself to throw £25k in the toilet every 3 years. That’s almost £500k over a lifetime!!

So after 3 years you would have still lost £25k.

How much is a 6 year old M5 worth?

(btw, I bought my car at 3 years old because it seemed to be the best balance…but i’m just not sure that the difference in cost between buying/leasing is as vast as you suggest)

Subtle brag. Like it.

😀

http://www.contracthireandleasing.com/business/car-contract-hire-and-leasing/bmw/m5/

6 up front + £600 a month over 36 months = £25,200

And it’s brand new, not three years old.

Work that out

Just realised the link you sent was for business leasing and not personal! Most people on here are talking personal leasing. that makes quite a big difference and is back up to the £35k i was referring to.

So £35k every 3 years – £600k over lifetime.

Subtle brag. Like it.

I can’t remember who it was, but there was a watch thread on here a while back and someone posted a close up of them wearing their expensive watch…with the RS6 badge on the grill of their car carefully placed in the photo too. I died a little bit inside 🙂

Just realised the link you sent was for business leasing and not personal! Most people on here are talking personal leasing. that makes quite a big difference and is back up to the £35k i was referring to.

The key with leasing is to pick whatever vehicle is currently being offered at a price that beats depreciation (or at least gets close to it). Like the M135i deals for example. I think picking random cars will always be expensive.

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

Me neither. For a start, don’t buy new, buy nearly new. 1-3 years old, let someone else pay the depreciation.
Warranty? WGAS when you’re saving £10k on the purchase price?
Then keep the car a long time. 6-10 years or so, you can then afford to throw it away and buy another. I’m talking £1000 a year to own a decent car.
I did similar with my motorbike – Needed something different and it was £2400 (Including some extras) to change. That was an 8 month old bike with £1700 off RRP. It had just been fully serviced, tyres, pads, chain/sprockets too. I lumped it all on a 24 month 0% balance transfer card and I’m paying £100/month off.
But if I want/need to I can sell it, pay off the card and have money in my pocket. Try that on hire/PCP finance….
🙂

But if I want/need to I can sell it, pay off the card and have money in my pocket. Try that on hire/PCP finance….

Why can’t you do that on PCP?

I’m doing it. Just into my 3rd year of a 3 year lease. To be honest the novelty of having a brand new car wore off pretty quickly. I get a car allowance from work even though I don’t drive to or for work. It’s just a perk. The only places I ever drive are for biking and I had an old cheap Daewoo people carrier previously that was used for hauling bikes around. It wasn’t the sexiest car ever but in hindsight it was perfect for what I actually use it for. Although having a new car is nice, I live in constant fear of scratching it, denting it, getting it muddy etc and then getting shafted when I hand it back.

I’m in the market for a van just now and I’m going to hand the lease car back early. The wife has a company car too so she can provide the “nice” car for non bike related stuff. I’ve never been bothered about not owning the car. The way I see it my employer gives me free (taxed) money on top of my salary so this is just a frivolous purchase. I’m under no obligation to actually spend the money on a car.

That’s a fair comment BB. I need a car for my job, which tends to be all over the country. Not unusual to do 1000 miles a month business miles. So I guess it depends why you want/need a car. I’m also very aware that I don’t want to turn up in a flash car looking like the dick whose charging you a high day rate and spending it on toys. Old place I was working, one of the contractors insisted on parking his very expensing (AMG I think) Merc next to the MD’s jag 😉

Leasing is a good (not perfect) option if you need a car at a fixed price for a fixed term and with as little worry as possible that there will be problems with it. YMMV etc 😉

So… what good deals are around at the moment?

Not unusual to do 1000 miles a month business miles.

Lightweight. Get closer to 1000 miles a week and very few lease deals will work.

My last 2 cars I’ve bought 3 years old and very low mileage, for pennies. Ran them until 5 years old and 100,000 miles-ish. Despite that they are still worth something, well maitained, full history etc.

My last motor cost me £3000 (Purchase price minus selling price) over 2 years to buy, and I got 25p per mile for 80,000 miles. Not taxable.

I’m not leasing any time soon.

I’ve considered leasing my personal car on a couple of occassions but alway found the maths of owning made more sense as I’m prepared to buy a car 2-3 years old & maintain it & also keep it for 4-5 years.

I owned my last BMW 320d M Sport for 64 Months, Its depreciated £190 per month & cost me a total of £240 per month to run excluding fuel & insurance obviously. I couldnt find the same car for 12-14k mileage allowance on lease anywhere near that price.

Owning is only ever temporary anyway in most cases.

You usually p/x or sell at some point with losses to deal with and capital to find. Leasing and PCP you are dealing with deprecation as part of a monthly cost.

Tell you what though, it’s making me want an M5 😈

@SC- I used to do a lot more. But now all my clients are pretty local (50 miles ish) or I take the train if it’s London. Accountant reckons after 15,000 miles per year, leasing gets a lot less attractive.

You see I don’t want an M5. Because I know what I’m like. And it’d all end up in a hedge. I’m assuming the new Yeti will come with driving gloves and some kind of hat 😉

Owning is only ever temporary anyway in most cases.

+1

This is what I don’t get.

Renting v buying a house (ie an appreciating asset) – the financial advantages of buying are obvious. After 25 years renting you own nothing and have spend loads. After 25 years paying a mortgage you spent loads but own something that’s (hopefully) worth more than you spent.

Renting v buying a car (ie a depreciating asset) – After 3 years of renting a car, you’ve spent loads and own nothing. After 3 years of buying a car you spent loads and own something worth much less than you bought it for…and it continues to go that way until it’s worth nothing at all. Most people will generally sell below this point, so the cost is bought price less sale price. It all costs you loads of money, it’s just a question of how much.

But I guess if you set a limit (say £250 a month loan, raising by 3% each year to allow for inflation) and bought the cheapest car you could then traded it in every three years to get a slightly better car you would eventually be in an M5. And by replacing every three years you should have mainly cost-free (apart from servicing etc obviously) motoring as any problems should be fixed under warranty.

So… what good deals are around at the moment?

I went with Ling’s cars. She was impossible to beat. The site’s a riot visually but it works and everything’s up front with no hidden extra costs

http://www.lingscars.com/

Is she the best value? I equally love and hate the website!

You all need to stop buying cars that deprecate.

You all need to stop buying cars bikes anything that deprecates.

I went with Ling’s cars

I just clicked the link, now I’m typing through my own vomit, thanks for that!

I’m with Peter Poddy:

don’t buy new, buy nearly new. 1-3 years old, let someone else pay the depreciation.
Warranty? WGAS when you’re saving £10k on the purchase price?
Then keep the car a long time. 6-10 years or so, you can then afford to throw it away and buy another. I’m talking £1000 a year to own a decent car.

I just want a reliable, reasonably economical big bus that’ll happily munch 20K miles a year and I don’t want to be worried about cost of carpark damage.
I’m not remotely bothered about owning the thing or not.
Hoping my 18 month old Mundane-o estate should work out at about £100 per month over it’s expected lifetime (depreciation, repairs and consumables)

I’d happily pay a bit more for a lease… maybe at as much as £150/month I’d still be “in” (after amortising deposit and damage fees) but I can’t find a lease at that 🙁 so I buy (hopefully wisely)

You all need to stop buying cars that deprecate

Unfortunately my car allowance doesn’t stretch to a Ferrari Dino…

Ive never understood how these can be good value.

The lease company still buys the car, factors in the deprecation, cost of running it and etc etc. It then adds profit and the cost of finance which are usually higher than you could ever get on savings.

So how does this work out cheaper than just buying the car? I understand it removes risk and makes financial planning easier. It might be because I never buy new cars, alwasy about 3 year olds.

The lease company still buys the car, factors in the deprecation, cost of running it and etc etc. It then adds profit and the cost of finance which are usually higher than you could ever get on savings.

So how does this work out cheaper than just buying the car? I understand it removes risk and makes financial planning easier. It might be because I never buy new cars, alwasy about 3 year olds.

If you never buy new cars then it’s irrelevant. You have to compare like with like.

The reason some can beat depreciation is because of a combination of strong perceived residual value and huge discounts. Look at the leases that were offered on the Golf R. £30k car for £150 a month. Much of this was because of the huge value put on the car at the end of the lease term.

Ok I’ll add more details on the ones I’ve had.

I’m on 6th now all have had 15k mileage allowance so why are people claiming it’s for low mileage only? I have a salary sacrifice too so get savings there, what 3 to 6 month deposit is that then I’ve never pain one. All have gone back with no further cost to me, any damage has been seen as fair wear and tear. Last one the garage checking it over tried it on, they made marks looks far worse than they were by washing it, T cutting then polishing but without removing the polish. They sent a £400 bill for the cost of the repairs that if I really wanted them done would of been less than £150. They didn’t concentrate very well as the signed paperwork for the inspection on sending it back nulled me of this cost so they had to pay.

Why would I be leasing a 3 year old M5? Cars like that are expensive on a lease for a reason, family cars are cheap.

Golf GTD on 2 year lease with 15k no deposit is looking at about £265 for me just now so that’s £6360 including all service costs, tyres, parts and insurance. Far cheaper than you’d for proclaimed 3 year old one.

They also buy 1000’s of cars a year, more discount may be offered to them than you buying one car via a dealership. They also are rather good at picking up excess stock, helping out sales figures etc. This all means they are usually buying at well below list price.

I did a quick calculation for the basic 5 door Golf which is what we’re planning on getting. It costs £21,670 new. PCP over 3 years costs a shade over £16,000. I’d then hand it back.

A 3 year old 1.6 Golf with 30k miles on it goes for around 12000 on Autotrader. If I were able to sell it on for that much then I’d be looking at a loss of £9670.

Seems I’d save £7000 just buying brand new and taking the depreciation? Or am I missing something here?

I did a quick calculation for the basic 5 door Golf which is what we’re planning on getting. It costs £21,670 new. PCP over 3 years costs a shade over £16,000. I’d then hand it back.

£444 a month for a Golf??? 😯

When I got my M5 the lease price was £550+VAT so total cost over 2 years is £19,140.00 inc VAT. The list price was £75k and at the time, you could get roughly a 12% discount off list price so that would’ve made the buy price £63k ish. If you didn’t want to lease, you could either pay cash, traditional finance or PCP. PCP is the closest comparison to leasing but the deposit needed was double and the monthly payment £150 more. 2 year old M5s are selling for £45k ish at main dealers, so the PX figure would be more like £40k so a £23k depreciation plus interest on the monthlies making the total cost closer to £30k.

Obviously no-one ‘needs’ a brand new M5, but if it’s affordable and works out significantly cheaper to lease then why not?

curiousyellow – Member
I did a quick calculation for the basic 5 door Golf which is what we’re planning on getting. It costs £21,670 new. PCP over 3 years costs a shade over £16,000. I’d then hand it back.

A 3 year old 1.6 Golf with 30k miles on it goes for around 12000 on Autotrader. If I were able to sell it on for that much then I’d be looking at a loss of £9670.

Seems I’d save £7000 just buying brand new and taking the depreciation? Or am I missing something here?

No, that is a very bad value finance deal! My wife has got a new Golf R 5 door which is £220 per month on a lease so total cost over 2 years is only £6380 (inc VAT). That is for a £31k list price car.

Thought I’d get a quote for the M5 just for comparison. £1200 per month for 3 years 😯

Drac – Moderator
Thought I’d get a quote for the M5 just for comparison. £1200 per month for 3 years

Yes the deals of 12-18 months ago were very good!

I used the Volkswagen website to come up with that figure using PCP which I think the OP was referring to?

Deposit: £2167
Acceptance fee: £125
36 x £382.14 monthly payments.

Interest rate was 7.3% APR.