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Model specific boards => Golf mk8 => Topic started by: Gjm on 05 August 2024, 11:54
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Looking at possibly changing vehicles and seeking the groups wide knowledge on the personal leasing experience, is it worth doing and are there any downsides to the more traditional PCP financing options?
Looking around PCP deals seem to be very expensive compared to current PCH deals, but though I have previously looked at leasing it's not something I've done, even though they look to be a very similar experience for those that hand their cars back in after the PCP finishes to get something newer. Obviously you don't build up equity in a vehicle to use as a future deposit, but that seems to be offset in the less total cost over the whole rental period, 36 months or 48 months, for driving the vehicle.
From a purely finance perspective leasing seems the better option, less cost up front (i.e. deposit), less cost each month, and total cost over the period can be 30-40% less than PCP.
Obviously the vehicle is not yours and needs to be looked after, and any damages, etc. made good, but you would need to do that for any PCP vehicle you hand back anyway? Are they stricter in what they allow for fair wear & tear with leasing compared to PCP?
Would appreciate anybody's comments if they have tried leasing or that is what they currently do. Looking around at options is a minefield and at the moment I cannot see any downside to going down that route.
Thanks,
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Leasing - the negatives are that:
1) They will go over it with a fine toothed comb. Every excess mile, every imperfection can and will be charged - could be expensive. I guess PCP could be the same if you return it - I never have... I've always purchased the car even if I then sell or PX it. Usually the balloon payment is less than the residual value in the car.... although it might not be! Always worth checking!
2) If you want a particular spec you might not get it and/or you will pay every penny for the options over the course of your lease - they won't factor in pretty much any extra residual value of the options (although PCP can be like this as well - I remember certainly on the BMW I was looking at the GFV certainly didn't get effected by some options)
The positives are:
1) Its usually cheaper.
2) Road tax is included
I did a quick PCP on an utterly base GTI vs a lease:
Lease for 36 months for 10k miles pa: £15,800 (inc VAT)
PCP for 36 months and 10k pa: £21,000 (plus 2 loads of road tax)
Plus leasing you only needed to find £2500+VAT deposit and the PCP you needed to find £7214
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I guess the cost differential is something to do with:
1) on pcp you are being charged interest on the full amount of the value of the car minus the balloon payment (each month you pay some capital and the interest on the balance oustanding)
2) The lease company first of all are only basing their costs on the trade purchase price of the car (as opposed to VW)
On the face of it, if you factor in the car actually costing not £39,500 but probably at least £6k less... and then you possibly losing out on the residual value and the lease company taking it instead...
Basically there's no such thing as a free lunch but if you don't have wads of cash rolling around leasing will cost you less out of your bank balance.
You can game it to the max by using DTD to get a better price to start with and then PCP that... at that point it probably becomes similar costs overall, maybe less if you get lucky on the GFV vs resale value at the end.
Cheapest of all is to do DTD, VW PCP and then withdraw in 14 days (getting to keep your VW deposit contribution!) - if you have cash for an outright buy!
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Thanks Fred,
Your positive point 2 of the Road Tax is one of the major factors playing into my decision to go leasing, with more vehicles going over £40k to get that included is big plus. I know the base GTI in your example is below that threshold, but add different paint and a price rise, or any other option and you need to add another £1200 to PCP
As for the negatives, the only one causing some trepidation is the return, but not sure if I'm just making it seem like a bigger problem then it really is. I've returned hire cars before where they check to make sure its the same condition, and they are also quite likely to point out the smallest things to wring more money out of you, but I can imagine they are time limited, whereas the lease companies set aside the time to do it properly. When you Part Ex they do look at the vehicle, but the last one I did was all done over the phone with pictures, they did briefly glance at it when I turned up but nothing was said about any change in condition.
I agree about the options, it is the same with PCP, you pay for them up front. I very naively added quite a few options to a previous Passat, and when it came time to part ex, was told that they are not included in their calculations.
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Hello give me a call either way if you want honest advice 👍🏻
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I've run two lease cars, both through VWFS.
One of them I handed back, the other I purchased at the end of the lease...and still have it.
If the car is damaged (as opposed to fair wear and tear) then there will be charges coming when you hand back. As long as its a BVRLA registered lease company they will use BVRLA standards and a set scale of charges to work out what you owe.
https://customer.vwfs.co.uk/existing-customers/End-Of-Agreement.html?traci_s=ALL:VWFS:ORG:VWFS:Website:2024-01:&traci_ie=customer.vwfs.co.uk:Content:Button:CTA_End-Of-Agreement:
Leasing (PCH) is generally cheaper than PCP in my experience but you have less flexibility. You're entering into a contract to hire a vehicle for a set period of time.
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BTW on the higher rate of road tax... You are certainly going to find that rolled into the lease payments.. You wont be ducking it...
Most lease companies won't do you a factory order either. You'll have to pick from whatever stock.. And move fast because their stock moves fast.
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Most lease companies won't do you a factory order either. You'll have to pick from whatever stock.. And move fast because their stock moves fast.
Depends. Both my lease cars were factory orders.
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Thanks all, much appreciate the responses.
Had a good chat with Lee, and based on how I use the car, and the better costs involved with PCH I'm definitely leaning that way. Just waiting for a couple of quotes to come in before fully committing.
I know there is no way of ducking the extra road tax, but adding it into the overall car cost does sort of hide it, out of sight, out of mind mentality :D