[alpini]

I'm looking into changing my e92 325i and am confused with some of the financing. I currently have my car out on PCP, and if I change now, I'll just about break even (the car is worth the same amount that I still owe). The agreement was over 3 years starting December 2008.

My issue is this:
- I change my cars often (18-24 months)
- I paid £8000 deposit on my current car and am paying ~£400/month on PCP

I never thought about contract HIRE until I came across it on internet. I figure that for around the same monthly payment (maybe even lower), I can get similar spec car without such a huge deposit....?

Am I right in thinking contract hire could be better for me? Especially since I change my cars often. I don't have a business so the VAT reclaim is not an issue for me.

Cheers for any advice - my head's tormented with this and I'd like to change quickly!

[NFS]

Originally Posted by alpini

I'm looking into changing my e92 325i and am confused with some of the financing. I currently have my car out on PCP, and if I change now, I'll just about break even (the car is worth the same amount that I still owe). The agreement was over 3 years starting December 2008.

My issue is this:
- I change my cars often (18-24 months)
- I paid £8000 deposit on my current car and am paying ~£400/month on PCP

I never thought about contract HIRE until I came across it on internet. I figure that for around the same monthly payment (maybe even lower), I can get similar spec car without such a huge deposit....?

Am I right in thinking contract hire could be better for me? Especially since I change my cars often. I don't have a business so the VAT reclaim is not an issue for me.

Cheers for any advice - my head's tormented with this and I'd like to change quickly!

It's down to the detail of the deal. Unless you are doing this through a business?

If you change your car before it's second birthday you are taking the worst of the depreciation. This affects the numbers on both PCP and contract hire. Also many contract hire figures are advertised exc VAT !

In my experience you get the best numbers on lease purchase, which is like PCP, but you take the risk on the final payment.

[sheps]

Contract hire is, generally, much less flexible with regards to early settlement (i.e. for changing your mind and wanting out of the car).

PCP, as long as you pay what's owing you can generally get out at any stage.

With Contract hire, you're normally tied in for a fixed period and will take a bloody good penis rodding if you want out before the term is completed - often up to 50% of the outstanding contract hire.

You can negate this by looking at a shorter fixed hire period (i.e. 12 or 24 months) but watch the monthly rentals rise - most examples are based on a 3+35 basis, and will rise anywhere between 10 and 15% for each reduction of 12 months.....

[M3-FAST]

There will always be pro's and con's of deciding either - the biggest disadvantage of contract hire is that you CANNOT get out of it - of you take a 2 year lease deal, then you pretty well have to keep the car 2 years. The contracts are watertight - I tried to get out of my E93 a few years ago after it spent months in the garage with loads of faults, and it was nigh on impossible to get rid of the car.

The big pro is often the price - I have leased lots of cars now and you need to look for the deals.

We are currently leasing the missus Citroen C5 2.0 VTR+ HDi - £18k list price for £179+vat a month on a 3+23 deal. There was no way we could get anything near the amount of car we got for the money elsewhere. It is just coming to the end of the deal and today I have asked for the cost to purchase. £7500 is there reply! webuyanycar.com have offered £9125 for it so am just in the process of buying it. The grand or so profit in the carhas now just negated the last 6 months payments making the car even cheaper!

We have just negotiated a Passat CC GT 140 on a lease deal to replace it. To get the same £235+vat monthly payment I would have had to chuck £6k in instead of the £800+vat required on the lease deal. Again in 24months time, we will look again for the next deal.

Keep looking round the brokers and see what buying power they have had recently - you often see a deal across all the brokers on a certain car - it prob means that someone has loads of them pre-registered sitting somewhere and need em shifted qickly. They are the bargains to be sniffing around.

I personally favour lease but if you are the sort of person who just decides that you want out of your car, and into a new one, then it just might not be for you?

www.contracthireandleasing.com is a great site that compares lots of brokers prices and shows current special deals.

[davyk31]

I assume above you are talking about a personal lease rather than a business lease, or does it make much difference except in the personal option VAT is paid.

Sounds a good deal on the Citroen especially with the "cash back" now at the end of the deal.

[M3-FAST]

Originally Posted by davyk31

I assume above you are talking about a personal lease rather than a business lease, or does it make much difference except in the personal option VAT is paid.

Sounds a good deal on the Citroen especially with the "cash back" now at the end of the deal.

Doesn't make any difference - all prices are normally quoted ex-vat for business purposes. Just add the VAT on to get personal terms. A few say business only, but when you call them you can often get the same deal. My sister leased a new Civic Type-S that was quoted as a business only deal without any problems.

Some just quote that as the particular finance company who offer the deal, may only deal with ltd. companies but often if a deal is widely available, they just find someone else offering it to private individuals.

The Citroen deal has worked out fantastically - bargain car to start with - at £7500 sale price it makes you wonder how they ever made a penny on it? The list is £18k ish and whilst I know they must have been shifted cheap, we have only actually paid £4654+vat in payments over the 2 years.