car leasing or buying ?

[scotty]

Hi all, can anyone advise me of the costs and benefits and drawbacks of leasing a car. After working out what we paid for our 4 year old car and how much it costs for upkeep, I am wondering if I would be wiser to lease either privately or through my self employed decorating business. Can anyone give me any pointers please. Many thanks Scotty

[Octavius]

Well with leasing, you never actually own the car unless you pay the balloon payment at the end of the lease (about 30% of the new list price depending on the car). You are also required to keep service records up to date at your own cost and annual mileage may be limited. Monthly payments and the balloon payments are calculated on a % as if you are doing HP, although slightly more enticing as at the end of the lease (usually 36 months) you can exchange the car for a new one and continue your monthly payments. Whether you like the idea of �owning� the car or continually paying for it is up to you, but a car will always be a depreciating asset and after 3 years you are quite likely to want a newer one.

You might find some taxable benefit in doing it through the company, but you need to chat through in detail with a dealer/lease company first so that you understand the implications. Like most things, ask for clarification on ANYTHING that isn�t clear as once you have signed, its usually too late.

[spaced]

Actually octavius your wrong. You can own a car by leasing it, depending on the type of lease. A contract hire contract means that the vehicle will have to be returned at the end of the lease. Finance lease - you have the 2 options. Personal Lease you again have the options of keeping or getting rid of it.

As a fleet managers I see the benefits of both, but I would alkways Lease a car as apposed to getting a loan. Alot of the contracts allow you to take a maintenance contract out, which covers you for tyres, exhaust (fair wear and tear), serviving, tax etc etc.

If you want the vehicle to go through your business with the option of a peppercorn (lease extension) or owning the vehicle (paying the balloon) then I would go for a Finance Lease. Otherwise go for a PCP (personal contract purchase). Stay away from Arval, go with either LEX Vehicle Leasing or Leaseplan. Go through a broker too, they get you more dealer discounts as apposed to going direct. Trust me.

[Octavius]

Haven't you just confirmed what I said?

You can either hand it back, get a new car or pay the balloon payment to own it.

[spaced]

yes your'e right. Sorry, I read you answer incorrectly. I take it back.

[scotty]

Many thanks for your help , am going to investigate further , regards Scotty