Car leasing deals - any catches to beware?

orraloon

Searched previous threads on this subject; maybe this is one for VTech.

What issues / risks / extras / hidden costs are there in leasing deals to look out for? E.g. What's this insurance policy cost in case the market value at end of lease is less than the leaseco estimate? That one sounds to me like a simple offload of risk onto the customer.

Reason for asking is my neice starts college next term, has chosen to stay at home and travel in daily, but as the campus is not city centre and they live out in the sticks, the public transport option is not practical. Hence my brother has been trawling for good quality, cheap, reliable used car :?: and finding the expected load of dross.

I've suggested he look at leasing, e.g. the centralvehicleleasing lot which VTech mentioned before, and do the sums.

Any tips welcome. Ta.

lesfirth

Excess milage charges can be very high if you exceed the contract milage. Vehicle condition at the end of contract can be a contentious issue. Some lease companies want to charge for rectifying the minutest of scratches or dents.
Overall if you look after the car and don't do a high milage you can get some very good deals.

diy

As above. And..
- The need for gap insurance in case its a write off and the insurance doesn't cover new for old

and all the other insurances they try to pile on to cover liability issues.

If its a very expensive, highly depreciating vehicle that you don't want to keep after 3 or 4 years and the lease company has links to the manufacturer essentially getting you a trade discount, then its good.

For the use case described - bangernomics is by far the best option.

I really can't see that a budget new car is going to work out better than an auction/autotrader deal.

You have a better chance of dodging a speeding ticket in a lease car.

VTech

I use these guys;
http://www.centralukvehicleleasing.co.uk

We recently had a vehicle stolen but the only loss was the deposit which although was a bummer, its the same no matter who you use. The prices on this site are the best on the market and they are simple and easy to deal with.
We have several staff cars through this company and not an issue so far.

diy

Clicked on the above and chose a Seat Leon Diesel whatever that is, looks like I'm paying 80% of the value of the car over 4 years? first year cost is around £4,100, so I look on Auto trader, plenty of reasonable looking 06-09 examples well below £4K

really got to question if a new car is right for a young person off to uni. Go to the other end of the scale and there were a few at <1,500 - if I can keep it going 6 months etc..

andyrr

I was pretty close to doing a deal with Applied Leasing for an A4 Avant but the finance co they went through raised issues (pretty spurious ones as it happens) with our credit rating so I eventually sourced a much cheaper s/h car myself. Some leasing cos seem to have links to manufacturers giving them unbeatable prices - that was the case with the A4 deal. The initial deposit is a fair chunk but the advantage is that although you don't own the car it isn't you who has the depreciated vehicle at the end of 3 years to sell. Certain companies have particularly good deals on specific cars, other leading cos will be better for other cars, need to search around.

VTech

[url=http://www.bikeradar.com/forums/viewtopic.php?p=19684548#p19684548]diy[/url] wrote:

Clicked on the above and chose a Seat Leon Diesel whatever that is, looks like I'm paying 80% of the value of the car over 4 years? first year cost is around £4,100, so I look on Auto trader, plenty of reasonable looking 06-09 examples well below £4K

really got to question if a new car is right for a young person off to uni. Go to the other end of the scale and there were a few at <1,500 - if I can keep it going 6 months etc..

Seat Leon, 1.6d
£17,980 New
Lease deal:
£1500 deposit
£69/month over 24 months

Total paid in the 2 year deal: £3156 or around 17.5% of the cost of the car AND you can claim much of it back at your end of year return.

Bargain.

norvernrob

Market value at the end of a lease is irrelevant, you just give the car back. PCP does have a future value, but that is the guaranteed price you can buy the car for if you want - if you don't want to, you still just give it back.

kajjal

Just had a quick look, a seat mii low mileage, main dealer approved, three years old is under £5,000. A loan is £150 or less a month over three years. The mileage you do or any scratches would be irrelevant and just add in service costs and insurance. At the end you have an asset worth about half what you paid after three years. Makes more sense than leasing unless you have uncertain needs.

There are plenty of similar cars at the same age and price. Three year old cars will normally be fine for years to come without the depreciation of a newer car.

The challenge you will have is the insurance cost leased or otherwise.