Pretty much a novice when it comes to cars, but I have had an MG TF for over 4 years with 60k on the clock and am looking to upgrade to a bmw 318i SE. The monthly rates for contract hire are attractive, but is it really worth not having an asset to sell at the end of 3/4/5 years?
Cheers
|
Read the small print carefully
Contract Hire is usually only available to business users (i.e. company fleets). Private "buyers" usually have to go the PCP route which attracts considerably higher monthly payments.
Figures quoted are almost all for 10,000 miles per year with no maintenance cover. Very few people do 10,000 miles a year or less.
Figures quoted almost always exclude VAT
Most companies demand 3 months rental (+VAT) up front
I saw the new Golf GTI advertised at £295 per month on contract hire. When I actually looked into it with the mileage I do (£20k pa) and on PCP rather than contract hire it nearly doubled.
There are deals out there, but the adverts only ever quote best case scenarios, very few of which are relevant or applicable to the typical private user.
Cheers
DP
|
You could give www.hitachicapital.co.uk/affinity/ a try. I'm not connected with them in any way, shape or form....
I've been pointed toward them as a cheap source of leasing. Technically, it is a PCP but still seems to be cheap, with no 3 up at the start of the agreement.
DB
|
I am considering contract hire/leasing too.
When you buy, you may have an asset to sell after a few years, but chances are that you'll buy another car, so you never really get chance to realise the asset.
OK I know that's a simplistic approach, but that's what I'm telling myself!
So far I have found that personal v business leasing does only seem to be a matter of VAT (following links from this site). 3 months up front doesn't seem too onerous to me, but 10,000 miles pa is right on the borderline of my normal annual mileage. It seems to be better value to keep the extra cost of maintenance etc in the bank - but I suppose it is a gamble.
Anyway, I'm having a harder time shortlisting possible new cars (the Picasso has to go!) Maybe the London Motor Show in a couple of weeks will provide inspiration (going for work, honest!)
|
"The monthly rates for contract hire are attractive, but is it really worth not having an asset to sell at the end of 3/4/5 years?"
A car is not an asset. It depreciates - severely in most cases - from the moment you collect it off the dealer. So the aim must be to minimise the cost of paying for it.
Whether owing the car is an advantage depends on whether you intend to replace the car at the end of the lease. If so, take the cheapest deal that gets the car you want (with no terms and conditions you find unacceptable in your particular circumstances). What does it matter that you don't actually own the car if you're only going to sell it again at the end of the deal anyway?
If you're going to keep it, look for the cheapest deal whereby you own it at the end. Think in terms of the total cost to borrow/lease - the difference in interest paid on a three year vs. five year car loan, for example, adds up quickly!
|
Make sure you look into costs of breaking contract - i.e. you change jobs, company goes bust - it is can good addition to the basic monthly charge if things go pear shaped.
A Company I used to work for had this added to the leasing company they recommended - it was only a few £s per mth AFAIK.
I always bought (on a Personal Loan rather than HP, Personal loans can be lower than 6% APR - HP tends to be more) and ran my own car as I look after the car well and I benefitted from better residual values than the leasing company had.
Equally I could hold on to the car for another 6mths/year or trade in early and then buy the new model or another make and model.
Look into the HP route / Personal loan and remember to compare apples with apples.
|
Several of our guys went for Personal Contact Hire when they opted out of their company cars. Seems the main issue (as touched on previously) is to be as sure as you can that your circumstances won?t change as the termination penalties are horrendous. However you can insure against this, even down to cover if you simply decide to resign from your job.
It?s not always that expensive as some manufacturers subsidise rental rates rather than reduce the list price of their cars (Mercedes, for example, are noted for doing this).
|
contract hire is usually shown without vat for business, coz they can claim half back.
Contract hire for companies is actually a lot cheaper than for individuals, even though the rate may be the same, because the money YOU pay has already had tax taken off. IAlso consider, f its a business hire, you will have BIK to take into account.
One thing to watch for is the higher initial deposit to provide lower rates.
And dont forget that the 10k pa is not a limit, you will be charged per mile over. Some rates are a lot higher than others, so check.
a website i have been looking at is www.lingscars.com , its a bit of an odd site, but does seem to have some good deals.
Oh, and renault megane hard top cabriolets seem too cheap to be true - guess no one wants one!
|
|
|
:no_upscale():format(webp)/https://cdn.uk.prod.group-mobility-trader.com/images/cas/94a41c6396d23935fb1f88c1a3493881/9108162a32e3d795678aa08cb1738b0e.jpg)
![2022 Fiat 500 1.0 Mild Hybrid Dolcevita [Part Leather] 3dr](https://img.common.prod.group-mobility-trader.com/unsafe/trim/90x60/smart/filters:quality(70):no_upscale():format(webp)/https://cdn.uk.prod.group-mobility-trader.com/images/cas/cd26f1e1622450687356b54f40eb4a2c/f7dae57494470d2d4c9d52016377e90d.jpg)
:no_upscale():format(webp)/https://cdn.uk.prod.group-mobility-trader.com/images/cas/fc8d5aaa396b844550aafd1dd5657c52/d6773cab48c576b027b0654146b4cfa0.jpg)
:no_upscale():format(webp)/https://cdn.uk.prod.group-mobility-trader.com/images/cas/78b35aab69d86b93b1c7502a3a8072ca/a21c3833a398a5beae0aa0a73f3f34d7.jpg)
