DavidY80
Not RoHS Compliant
You might find this useful if considering leasing: -
http://www.bvrla.co.uk/advice/guidance/returning-your-leased-vehicle
http://www.bvrla.co.uk/advice/guidance/returning-your-leased-vehicle
Car Leasing.
- Thread starter Mullardman
- Start date
Mullardman
Moderately extreme...
Thanks for all the suggestions chaps. All useful stuff.
Took her to have a look at the possible replacement today. She drove it a good few miles but described it as feeling 'loose' c.f. her last one despite lower miles. Couldn't make her mind up and is frankly very hacked off. Can't say I blame her as her last one, now written off, was a beautiful, spotless example and nothing around seems to match it.
No doubt the bus driver who decided to run into her has had no such troubles.
Mull
Took her to have a look at the possible replacement today. She drove it a good few miles but described it as feeling 'loose' c.f. her last one despite lower miles. Couldn't make her mind up and is frankly very hacked off. Can't say I blame her as her last one, now written off, was a beautiful, spotless example and nothing around seems to match it.
No doubt the bus driver who decided to run into her has had no such troubles.
Mull
Mullardman
Moderately extreme...
Not exactly but it set the standard which she is now trying to match.
Mull
Mull
clivem2
pfm Member
I'm looking at a couple of cars. One seems better to lease as list price discounts are 2% and the lease price decent. The other has a 10% discount but higher lease price so could be better to buy. Residuals shouldn't be too different.
Another option could be PCP. In round figures the car is £40k; £20k initial payment then 36 x £144 with a final payment of £19k should I want to keep the car. Over 3 years I'd be paying £4,000 in interest. I retain the use of £20k by not buying the car outright initially. I suppose 6.9% is still an expensive way to do this.
Just thinking out loud here...anything I've missed or have wrong?
Another option could be PCP. In round figures the car is £40k; £20k initial payment then 36 x £144 with a final payment of £19k should I want to keep the car. Over 3 years I'd be paying £4,000 in interest. I retain the use of £20k by not buying the car outright initially. I suppose 6.9% is still an expensive way to do this.
Just thinking out loud here...anything I've missed or have wrong?
That looks like a very strangely structured PCP. The start payment/deposit is very high indeed, the monthly payments hardly worth talking about given the value of the car, and the balloon at the end hefty. The monthlies add up to hardly more than the cost for credit. If you did genuinely have £20k, or a car to that value, at the start, why not pay the rest of the £20k as monthliy payments? Equally, if you only had 150 pcm spare, yet you had £20k or a £20k car, at the start, why not just keep the £20k car?
gintonic
50 shades of grey pussy cats
Actually yes, the deposit does look strangely high - but that is what would be keeping the monthly's down low. I always pay the min deposit possible.
For my last 8 PCPs and the current one - I set my monthly payment budget first, then my deposit.....then go shopping........
philsparks
pfm Member
Another option could be PCP. In round figures the car is £40k; £20k initial payment then 36 x £144 with a final payment of £19k should I want to keep the car. Over 3 years I'd be paying £4,000 in interest. I retain the use of £20k by not buying the car outright initially. I suppose 6.9% is still an expensive way to do this.
I just did a quick discounted cashflow on this and assuming a £40k cash cost it gives an APR of 7.7%. Not a massively high borrowing rate but not tiny either. You say "I retain use of the £20k" - whether the financing is worthwhile depends on what you're going to use that £20k for - if you have the 20k in cash and could make more than 7.7% (actually you need to make 7.7% net of tax) then it may be worth it. If not and it's currently earning you less than the 7.7% you'd be better to just buy the car outright. If you walked into the garage with £40k would you not get a better discount?
Phil
I just did a quick discounted cashflow on this and assuming a £40k cash cost it gives an APR of 7.7%. Not a massively high borrowing rate but not tiny either. You say "I retain use of the £20k" - whether the financing is worthwhile depends on what you're going to use that £20k for - if you have the 20k in cash and could make more than 7.7% (actually you need to make 7.7% net of tax) then it may be worth it. If not and it's currently earning you less than the 7.7% you'd be better to just buy the car outright. If you walked into the garage with £40k would you not get a better discount?
Phil
clivem2
pfm Member
You're right about the return on 20k invested. It just seemed less painful to paying out a smallish amount each month. As for discount it can work out better if there's a finance deal involved, or at least start out saying you want finance then switch to cash at the last minute.
I think that way too now. If youve got capital tied up thats working for you then why deplete it on a depreciating asset? It does of course depend on how well that capital is working. If you can find a 0% or low rate PCP and negotiate a discount it looks like a useful way to get a car. I dont suppose I'll want to PCP for the rest of my life and I'll always have a get-out plan. One day it'll be pay at the end or hand back and purchase a different car. I think that's about 20 years away at least.
That's my point, anyone with £20k in cash lying about that they are prepared to put down on a car can afford a damn sight more than £144 a month. Pretty well anyone can find £144 a month, unless they are utterly skint, but precious few have £20k spare. Let's be honest, £20k will get you a very nice car bought outright, no monthly payments, mo final settlement.
Then you should lease. You are throwing money away.
Isn't it dead money either way? Unless you're going to say a lease is cheaper ( maybe it is, I don't really know) But a lease is finite from the start i.e. mileage and condition are agreed, payments are fixed and the car gets handed back - no other option. I know mileage and condition apply to PCP deals but there are options at the end, and indeed earlier, if you wish.
It will be generally if you always hand the vehicle back. PCP are designed to have equity built in at the end of the term to put as a deposit against your next vehicle.
PCP are also a retail product where your buying power is one. Pch is a business product with the discount reflecting the buying power of thousands....
Gintronic says he always hands the car back. PCP is not the right product if that is the case.
clivem2
pfm Member
When I look at the better deals the lease over 3 years is around £20k. PCP is £24k and that's with putting £20k down and only paying £4k of interest. I'd have to re-run the numbers for a small down-payment, it'll end up about £7k more than the lease over 3 years I reckon. This is a for an F-Pace. A GLC works out a little more expensive but is cheaper to buy outright.