Having just read through Peugoet's website, I'm slightly baffled at how they've managed to market such a wobbly deal quite honestly. If you opt for a modest base-spec 207, you pay an initial rental of just over £1500, then monthly rental of £179. At the end of the deal, you can hand it back - and presumably find out how picky your friendly local dealer is when it comes to the dreaded vehicle inspection and excess charges - or you opt to KEEP - but not OWN - the car. This entails paying what Peugeot consider the car to be worth - in this case around £4.5k - but not actually owning it, instead continuing to pay an annual fee equivalent to your previous monthly fee. Put simply, you pay what the car is worth as if buying it, but it still belongs to Peugeot! Brilliant! Why on earth don't they just let you have the thing, are they really that desperate for a couple of hundred quid a year?! What isn't detailed is how long this arrangement will last, so if you wanted to keep it for another then years would you continute to pay them all that time, or do they eventually take it off you and leave you with nothing?

As ever, the headline figures and prices are for the bottom deal, so the stated £179 per month for a 207 limits you to just 6500 miles per year or thereabouts, which isn't great considering the average mileage tends to be quoted as somewhere around the 10k mark. Also worth considering is that the 'free servicing' includes only the basic routine stuff - so when it comes to your tyres, brakes, clutch and fluids etc, you helpfully pay for Peugoet's car to be kept in tip-top condition so it's all spick and span when they eventually get it back! Remeber, it's never going to be yours regardless of how much you spend on it! Also bear in mind the insurance is not available to under-25s, or under-30s on some of the juicier models, with a minimum of 2 years NCB and certain other restriction. So work out how much you'd actually save as your premiums shouldn't be all that much on a basic car at that age.

Personally, I'd take my money down to the local used dealership and actually buy something!

Edited by Problem_Polo :-/ on 14/06/2011 at 13:09

Well, obviously tax savings abd suchlike are great news for businesses, however I think it represents a poor deal for the punter.

don't borrow to fund a depreciating asset and just buy what you can afford - applies to most things, not just cars.

I'd say that's too simplistic - a depreciating asset needs to be funded - you can do this in lump sums (buy a car outright, no more capital cost until you need to find the money for the next one...) or by instalment (pay for a car on a monthly basis), but depreciation is only part of the cost of motoring and you need to look at individual circumstances and the motor expenses in total. Sometimes it can be worth incurr more capital cost (including a bit of interest) in return for much lower, fuel, insurance, vehicle tax, service and particularly repair costs...