New Car Finance Question

[Markio]

We might take advantage of the scrapage scheme before our wreck of a Punto final falls apart. Anyway, lots of deals out tehre, most appealing is the 'lease' type options.

 

Taken from Toyota Aygo site as an example:

 

After scrapage.....

 

Monthly payments: 36 x £124

Term (months) 37

Cash Price: £6,495.00

Deposit: £0.00

Amount of Credit: £6,495.00

GFV / Optional Final Payment: £3,352.92

Total Amount Payable: £7,816.92

 

So, no deposit, simple monthly payments for 3 years. After which am i right in thinking i can simply give them the car back after this term, pick another new car with a new agreement and continue paying (effectively leasing the car) or alternatively after the 36 months pay this GFV / Optional Final Payment amount of £3,352.92 and then own the car outright?

 

Is it really that simple? You collective knowledge i trust, sales people (not just car sales) i don't!

 

Any pitfalls?

[al4x]

it is that simple, obviously you are technically only leasing it if you give it back and also have to pay for usual running costs and maintenance. So basically it costs you £4464 to have a car for 3 years,

You usually are limited to the miles you do and there is a charge for excess miles if you give it back, and they can charge for any damage etc

Edited May 28, 2009 by al4x

[Markio]

Thanks Alex.

 

After looking at loans for £4000 over 4 years being around £95-£100 this 'lease' option seemed like the way to go. Well the Aygo example isn't a good comparison in this instance as there are cars and finance offers that match this. We're looking at 2nd car shopping trolley.

 

Going new means no MOTs, warranty and a choice of cars with £35 tax (next year £20 if you get he right one).

[leaseone]

Yes you can give it back and pay no more, but dont forget you will not get Scrappage on your nrext car all the Dealer is doing is using your discount s a deposit.

 

p.s thats why I am Leaseone

[Markio]

Yeah, i realise the scrapage scheme is just for cars over 10 years old etc.

[MC]

Mark,

 

My missus has got a fiesta on ford options which is basically a private lease agreement. She gets a new car every 2 1/2 - 3 years and it seems to be a very good deal. As you say no MOT's a warranty and a garanteed future value. You also don't have anything to worry about as it isn't really your car.

 

The one before last was a dog and was in the garage more than it was out but at no cost.

[AVB]

yep that's how it works. Quite simple other than the potential bill you get at the end (if you hand the car back) for damage in excess of fair wear and tear at which point they will try to rip you off (see previous posts on subject).

 

Andrew

[MC]

We have never had any aggro with ford, on two occasions we have got a higher value on the car than the GFV and that has been deducted from the cost of the next car.

[AVB]

We have never had any aggro with ford, on two occasions we have got a higher value on the car than the GFV and that has been deducted from the cost of the next car.

 

I think the reason for that is that you have been buying a new car every time. In this case the dealer takes on the 'old' car and overlooks any minor damage as they don't want to put you off of going ahead with the deal. The problem comes if you hand the car back. They (the manufacturer themselves not the dealer) then look for every reason to charge you money (I am in dispute with Mercedes for £900) as they want to make more money on the transaction.

 

Andrew

[Markio]

No sure i understand how the GFV offsets the next car you buy? Isn't that irrelevant if you choose to take out another agreement on another car? Are you suggesting that if you handed back the car in pristine condition the value is therefore higher and that extra value works in your favour offsetting the cost of the next car? I must admit, i assumed handing back teh car in a agreed suitable condition you and the dealer we squared up and you start again.

[MC]

You are right, Any value the car has over and above the GFV is in effect used as a deposit on the next car. I am not sure what would happen if you didn't want a new car. I doubt they would give you the cash.

 

Both times with Traceys car it has had lower mileage than the agreed figure and have been kept in very good condition.

 

She has always traded them in earlier than the agreed end date as well. She will normally get a phone call from our local ford dealer when she has had her car about 2 1/2 years.

[adymorris]

It's all designed to get you in a loop - you overcome the deposit for new car No.1 by trading in your old shed then after 3 years you are faced with paying another large chunk of money for a car you have virtually paid for OR coincidentally using the GFV to offset as a deposit for new car No.2 and so it begins again

 

The upside of it that you get to drive a new car every few years the down side of it is if you stop the cycle you don't have a car and have to start over again, find a deposit for another car on another scheme or buy one on HP

 

Personally I'd buy (and did) a 3 to 4 year old prestige car and enjoy a 70k car for 10k - I still have it after 6 years and it has cost me a hell of a lot less than several lease cars would have done

[Markio]

Personally I'd buy (and did) a 3 to 4 year old prestige car and enjoy a 70k car for 10k - I still have it after 6 years and it has cost me a hell of a lot less than several lease cars would have done

 

Point taken here but we're after a dirt cheap city car. The purchase price is one thing, i would guess your prestige car has higher running costs like servicing, fuel and tax?

 

Thanks for the input everyone, we're off out today to see what's available.