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The whole car lease new car sales deal thing.


TONY R
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My understanding is that its actually now illegal for car garages to earn commission or uplift the cost of a car warranty - these now must be sold at cost so there is no benefit in selling them.

 

I'd have heard about this by now :hmm: there is no point in offering to sell anything if there is no financial gain, why would you ?

 

I'm not against buying 2nd hand or old cars as they clearly serve a very good purpose, my first car was a 1974 Mini Clubman which cost me £480 and after 3-1/2 years I sold it for £420, a V reg Rav4 bought for £1450 sold on for £1400 after almost 3 years and a new 2002 Rav4 bought for £12800 sold for £10k after 3-1/2 years but these were exceptional cases bought with a mix of luck and knowledge.

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Is this whole lease thing acctualy harming the consumers and the car industry as a whole, in 1976 a new ford escort popular 1100 two door salon was 1750 pounds brand new, and was the lowest depreciator in its class loosing lost 29% in 3 years, now today the best least depreciating small car is the Peuget 108 top 1.0 around the mid to late 8000s new and loses roughly half its vallue in 3 years 49%. Why is this. Nissan sunny spirit 1.7 diesels which were over priced in the 1980s in the uk, only lost 25% in 3 years which is incredible. Rare high end supercars lose more than that and the nissan was over priced by the importers here.

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Is this whole lease thing acctualy harming the consumers and the car industry as a whole, in 1976 a new ford escort popular 1100 two door salon was 1750 pounds brand new, and was the lowest depreciator in its class loosing lost 29% in 3 years, now today the best least depreciating small car is the Peuget 108 top 1.0 around the mid to late 8000s new and loses roughly half its vallue in 3 years 49%. Why is this. Nissan sunny spirit 1.7 diesels which were over priced in the 1980s in the uk, only lost 25% in 3 years which is incredible. Rare high end supercars lose more than that and the nissan was over priced by the importers here.

 

The short answer to why cars depreciate so much now compared to back then is over supply.

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Is that an over supply in the form of a huge number of of 3 year old carsturning up on the market brought about by leasing, with the conssumer picking up most of the shortfall one way or another. Will this be healthy for the trade as a whole long tern, will there be a satturation point eventualy. Been watching A 8 Diesels for a long time, Overall all ages prices are lower now and falling, this must be the same for many cars certainly similar ones.

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I never said they turn cash away, merely the fact that cash isn't as awesome as you think. Finance deals earn the company commission and it's miles easier to sell add on's such as warranties (which earn commission) with finance as the increase in monthly payments is usually very small and customers love it. Banks also charge us to deposit cash and it presents a certain amount of risk when sitting there counting thousands. It is not unknown for the lovely public to deliberately short change the dealer by hundreds relying on their good will to not count bundles, I have also seen the odd fake or 10 slipped into bundles. ;):yes:

 

Regarding your last point all depends on the kind of person/dealer we're talking about but in general selling cheap tat off your drive might allow you to overlook paperwork but any half decent dealer wouldn't do it, there are just too many ways to trip up and it's immoral.

But who's paying the finance company's cut, plus your commission? When you lease a vehicle just how many have their finger in the pie, how many are taking a slice?

 

Some years ago Late 93, early 94, I bought the wife a range Rover. It was under 12 months old and an ex mayors car "more or less" direct from council, very, very low mileage, seat covers and mats from new, always washed and dried after rain etc. It was new apart from last years registration plate. I made a very substantial saving on this virtually new Range Rover by paying cash. Not long ago I saved 33% on a used fork truck by paying pound notes (he wasn't interested in any discount at all by paying any other way), I've just booked 3 days in the Cotswolds for the wife and I and made a saving of 25% by paying cash. My current vehicle came from a dealer, I paid cash and bought it for half it's value. How he got round it I neither know nor care but I know I have a mint series 1 Disco with no corrosion, half leather and logo trim, air con, cruise control etc for a very reasonable price so I'm happy.

These aren't small sums of money we're talking about here, with the RR you're talking thousands. But, if you're happy to say fine upstanding dealers and people won't do anything for cash who am I to argue. It's surprising just who you can get to talk to when offering cash, you can get very high up the list. :good:

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But who's paying the finance company's cut, plus your commission? When you lease a vehicle just how many have their finger in the pie, how many are taking a slice?

 

Some years ago Late 93, early 94, I bought the wife a range Rover. It was under 12 months old and an ex mayors car "more or less" direct from council, very, very low mileage, seat covers and mats from new, always washed and dried after rain etc. It was new apart from last years registration plate. I made a very substantial saving on this virtually new Range Rover by paying cash. Not long ago I saved 33% on a used fork truck by paying pound notes (he wasn't interested in any discount at all by paying any other way), I've just booked 3 days in the Cotswolds for the wife and I and made a saving of 25% by paying cash. My current vehicle came from a dealer, I paid cash and bought it for half it's value. How he got round it I neither know nor care but I know I have a mint series 1 Disco with no corrosion, half leather and logo trim, air con, cruise control etc for a very reasonable price so I'm happy.

These aren't small sums of money we're talking about here, with the RR you're talking thousands. But, if you're happy to say fine upstanding dealers and people won't do anything for cash who am I to argue. It's surprising just who you can get to talk to when offering cash, you can get very high up the list. :good:

 

Expand on this a little as it's rather vague, what age and what did you actually pay ? Nobody ever gets a car for half it's value, it just never happens.

 

Dealers will often talk discount, it just needn't mean cash, that's all I'm saying.

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Discovery 1 in excellent condition with zero corrosion or advisorys, advertised for just over 3k and lots of interest. A similar one I was watching fetched nearly 4k. he wasn't very interested until I said I would come down with pound notes and all I wanted was the vehicle, mot and V5. No receipt or any other paperwork , he took the money and I took the motor. I paid £1600.

I had looked at a lot before this, spent 6 months looking so new what both private sales and dealers were wanting. This would have fetched well over 3k on ebay, good D1's fetch more than D2's now probably due to folk off roading them (getting fewer and fewer)

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I was involved with all this professionally for a while

 

We have three cars

L200 bought new 2 yrs ago - cash

Fiesta lx bought 18 months old a week ago - cash

 

Subaru XT bought ex demo 13 yrs ago big deposit 2 yrs low rate std hp 2 yr ( wasn't ready to change but got angry with a 12 month old piece of French junk and bought on impulse

 

 

Depreciation. Happens to all cars lease companies plan on it being greater than expected and then add interest. Exactly how is that every going to be cheaper?

 

Thing is some people cannot wait and have to get the latest thing. I don't go mad to change my guns either

 

Each to thier own whatever floats hour boat but nobody can tell the future

 

Ohthat Fiesta cost someone about 5 k in depreciation to do 12 k in plus the interest. I am good with that just glad it wasn't me

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Discovery 1 in excellent condition with zero corrosion or advisorys, advertised for just over 3k and lots of interest. A similar one I was watching fetched nearly 4k. he wasn't very interested until I said I would come down with pound notes and all I wanted was the vehicle, mot and V5. No receipt or any other paperwork , he took the money and I took the motor. I paid £1600.

I had looked at a lot before this, spent 6 months looking so new what both private sales and dealers were wanting. This would have fetched well over 3k on ebay, good D1's fetch more than D2's now probably due to folk off roading them (getting fewer and fewer)

 

Phew, I thought you were going to tell us of a 10 month old Disco with a £55k new price tag which you managed to buy for £28k, that would have been hard but not impossible to argue against.

 

You bought an old Disco for a cash deal you were happy with that's all. You were the guy who turned up with a bag of money with enough cash in it for the seller to let go, had someone else turned up with more he'd have sold it to him. Things are worth what someone is prepared to pay, the rest is conjecture. Nothing wrong with that if it makes you feel good but the way you worded your original post it sounded like you bought something for a price literally half its value (as in you could walk out and sell it on demand for double what you paid) which of course you couldn't because the seller proved that point already.

 

I have a spare 682e 32" with immaculate wood work ( wood not been used more than once or twice) which I advertised for £1450 on Guntrader and got 7 calls/emails all chomping at the bit but none would travel doon Kent and worse still none seemed to have heard the term RFD :hmm: in the end I dropped the price to £1250 below which I won't go and still no takers prepared to travel. It's in the cabinet worth £1450 of anyones money but ONLY when a buyer turns up.

 

Genuine mind numbing bargains do exist but you need a huge amount of luck and being in the right place at the right time. I once bought a Buffalo leather jacket with a £350 price tag reduced to £25 :yes: absolutely looks a million dollars but the sleeves were ludicrously long for the size hence no buyers. I had the sleeves reduced professionally abroad for the equivalent of a tenner.

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Is this whole lease thing acctualy harming the consumers and the car industry as a whole, in 1976 a new ford escort popular 1100 two door salon was 1750 pounds brand new, and was the lowest depreciator in its class loosing lost 29% in 3 years, now today the best least depreciating small car is the Peuget 108 top 1.0 around the mid to late 8000s new and loses roughly half its vallue in 3 years 49%. Why is this. Nissan sunny spirit 1.7 diesels which were over priced in the 1980s in the uk, only lost 25% in 3 years which is incredible. Rare high end supercars lose more than that and the nissan was over priced by the importers here.

 

Cars depreciate by 20% the second you drive them off the forecourt. It's called VAT. That makes 49% not sound as bad.

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Phew, I thought you were going to tell us of a 10 month old Disco with a £55k new price tag which you managed to buy for £28k, that would have been hard but not impossible to argue against.

 

You bought an old Disco for a cash deal you were happy with that's all. You were the guy who turned up with a bag of money with enough cash in it for the seller to let go, had someone else turned up with more he'd have sold it to him. Things are worth what someone is prepared to pay, the rest is conjecture. Nothing wrong with that if it makes you feel good but the way you worded your original post it sounded like you bought something for a price literally half its value (as in you could walk out and sell it on demand for double what you paid) which of course you couldn't because the seller proved that point already.

 

I have a spare 682e 32" with immaculate wood work ( wood not been used more than once or twice) which I advertised for £1450 on Guntrader and got 7 calls/emails all chomping at the bit but none would travel doon Kent and worse still none seemed to have heard the term RFD :hmm: in the end I dropped the price to £1250 below which I won't go and still no takers prepared to travel. It's in the cabinet worth £1450 of anyones money but ONLY when a buyer turns up.

 

Genuine mind numbing bargains do exist but you need a huge amount of luck and being in the right place at the right time. I once bought a Buffalo leather jacket with a £350 price tag reduced to £25 :yes: absolutely looks a million dollars but the sleeves were ludicrously long for the size hence no buyers. I had the sleeves reduced professionally abroad for the equivalent of a tenner.

Actually you're so wrong there. I, or he, could easily sell it for double, just not in the time constraints he had. He wanted cash NOW, and no-one else bothered to drive down and check it out. When I collected it I took it to a local independent LR garage, he reckons it's the best Disco of that year he's seen on the used market. Not so much an old Disco but the vehicle of my choice (and yes, I did briefly consider another new RR) and a vehicle that will rise in value.

In this case cash was most certainly king, and the fact I had it in my pocket for immediate purchase won the motor. The RR I bought in 93 was well under book price (well under) and again due to cash.

 

I suppose I'm fortunate now that I don't really want a new motor, been there and done that and don't want another. I have no time what so ever for all the gadgets and other rubbish they put in them. Cruise control, air con etc wouldn't sway my purchase of a vehicle and inbuilt satnav, fuel meter and all the other rubbish just annoys me to be honest.

 

Everyone to their own, if you think cash doesn't count for anything then so be it, your choice ................ some of us know differently though and that leaves a very nice gap in the market that cash buyers can exploit :yes:

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Everyone to their own, if you think cash doesn't count for anything then so be it, your choice ................ some of us know differently though and that leaves a very nice gap in the market that cash buyers can exploit :yes:

 

When it comes to dealers 9 times out of 10 you leave a deposit and arrange to collect days later because the car needs servicing or MOT etc, upon collection you slip your debit card into the machine and pay the balance, to all intents and purposes that IS cash, only safer and easier for the dealer. Someone waving paper money in front of me means absolutely nothing other than potential hassle, I would give my best deal regardless of method of payment.

 

I admit there are occasions where a desperate seller will sell below his ideal price but that is not an on demand repeatable scenario.

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When it comes to dealers 9 times out of 10 you leave a deposit and arrange to collect days later because the car needs servicing or MOT etc, upon collection you slip your debit card into the machine and pay the balance, to all intents and purposes that IS cash, only safer and easier for the dealer. Someone waving paper money in front of me means absolutely nothing other than potential hassle, I would give my best deal regardless of method of payment.

 

I admit there are occasions where a desperate seller will sell below his ideal price but that is not an on demand repeatable scenario.

It's far from cash, it's a traceable transaction for one thing. I never did say it was on demand, but there again nor is any sale otherwise you wouldn't have cars on a forecourt, they'd all be sold.

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It's far from cash, it's a traceable transaction for one thing. I never did say it was on demand, but there again nor is any sale otherwise you wouldn't have cars on a forecourt, they'd all be sold.

 

I really don't understand why people presume it's not traceable just because it's cash ! The deal has to have an invoice to back it up and regardless of payment method that money needs to be banked somehow. Yes I suppose the dealer could nick £200 and pretend he sold it for less but what happens if the buyer calls 6 months later and asks for the invoice saying he lost the original ?

 

And when it comes to private sales the money needn't be accounted for in any shape or form so what does it matter if a buyer transfers the money via internet banking rather than pay paper cash, who cares.

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I really don't understand why people presume it's not traceable just because it's cash ! The deal has to have an invoice to back it up and regardless of payment method that money needs to be banked somehow. Yes I suppose the dealer could nick £200 and pretend he sold it for less but what happens if the buyer calls 6 months later and asks for the invoice saying he lost the original ?

 

And when it comes to private sales the money needn't be accounted for in any shape or form so what does it matter if a buyer transfers the money via internet banking rather than pay paper cash, who cares.

No it doesn't and no it doesn't.

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He's effectively just paying off the depreciation of a new vehicle without having large sums of money invested in it. If he's the sort to always want/have a new car then it nearly makes sense. It makes the most sense to business users though.

The lease company can't lose, they buy cars in cheap, get them leased out, costs are covered by lease holder. At the end of the term the lease company have a car of gauranteed value.

nope!...I lease over two years and pay five grand off an 18,000 pound motor then it goes back and they sell it at auction for five or six grand losing the rest unless they are in cahoots with someone else ....I on other hand get new motor and start again....but not next time coz my sales guy is an ********!!!
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Cars depreciate by 20% the second you drive them off the forecourt. It's called VAT. That makes 49% not sound as bad.

The old MK2 Escort pop 1100 would have only lost 15% in that instance then, as VAT was 15% in 1976.

Even with the 5% reduction on the escort, it still beats the 2016 Lowest depreciator in small cars the Peugeot 108 by a comfortable margin.

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No it doesn't and no it doesn't.

 

If the vehicle is on your stocking list then it will have a bought in value attached to it, when sold it will need to be logged as such so that the VAT on profit element can be paid and at the end of the year it counts towards any profits made from which further corporation tax has to be paid. Are you thinking of a system where you sell cars that don't exist on paper (as in bought in for cash and sold off the books ?) because that is the only way I can think where money can vanish into thin air.

 

In practice even if some dealers do this it can't form the basis of the assumption that they'd muller their margin just to get the thing sold. If a car is saleable you might as well sell it for the right price. One of the things I tell noobs is in fact that very lesson ;) any fool can sell, it's selling it right that's the skill.

 

If I had a car off the books that was worth £4k cash, I'd make damn sure I got that for it.

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nope!...I lease over two years and pay five grand off an 18,000 pound motor then it goes back and they sell it at auction for five or six grand losing the rest unless they are in cahoots with someone else ....I on other hand get new motor and start again....but not next time coz my sales guy is an ********!!!

To me that just shows what they actually pay for a supposed 18k car. They wouldn't do it for a loss.

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Most times on the right car you would loose more than the cost of leasing in depreciation alone. 30 k car lease costs three years 10k normal depreciation could easily be 5k more than your lease costs, most throw in free servicing so more saved.

 

Only works for them wanting a brand new car. I'd rather buy the three year old car with 30k on the clock.

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Sometimes a deal will come up on lease that is out of this world, outgoing model,slow seller,etc backed by some manufacturer finance at a super rate all designed to shift units to keep factories running at optimum.

Last week I got sent details of a deal on an Audi RS8 £383 plus vat on an 6+24 deal, a cheap way to drive a cost a fortune super saloon but only available in 2 or 3 colours and spec was fixed.

 

Pre built cars that had to be moved.

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