Is 48mo Agility 'better' than 36mo?

Discussion in 'Insurance & Finance' started by petercooper, Mar 22, 2014.

  1. petercooper

    petercooper New Member

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    I got some Agility quotes for an A45 last week. The two key ones being:

    £550/mo for 36 months - £8900 deposit with balloon of £18400
    £550/mo for 48 months - £6960 deposit with balloon of £15050

    If I get sick of the car, can't afford it, etc. in a few years, voluntary termination at 50% of the finance agreement is an option. But that works out at roughly 35 months into a 36 agreement so.. kinda pointless :doh:

    But.. on a 48 month agreement, I get numbers of (48 * 550 + 15050) * 50% = £20725 - or roughly 38 months into the agreement. So going for the 48 month agreement would be a £2k lower deposit but I could still "exit" at just over 3 years if I really had/wanted to (though I'd like to own it longer than that).

    Other than the usual issues about having a VT on your record, am I missing anything major in this logic? I suspect I am because it just seems obviously more desirable to go for the 4 years, have a lower deposit, but still get the freedom to leave the agreement after just over 3 years..
     
  2. LTD

    LTD MB Club Veteran

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    Yep, one of THOSE !!!
    IIRC Agility is a PCP. Akin to a contracted personal lease.

    I don't think you have a hand back option apart from at the end of the contract. You would have under traditional HP.
     
  3. OP
    OP
    petercooper

    petercooper New Member

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    I've not been on Agility before, only having an operating lease for an SLK (which did not have the VT condition) but various threads I've read during my research here imply Agility has the "if you've paid at least 50% due under this agreement" VT consumer credit clause. (That's not to say it necessarily does on all deals or deals made right now, of course.)
     
  4. Dieselman

    Dieselman Banned

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    I think Vt does apply to Agility, but find it strange you are thinking of it even before taking an agreement out. that's not what the Vt arrangement is for.

    Is taking a 36 month or 48 month deal better? That depends on who for.

    MB finance will make more interest out of a 40 month contract.
     
  5. LTD

    LTD MB Club Veteran

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    Yep, one of THOSE !!!
    There is the other option.

    Keep the car until it is at settlement break-even and trade it.

    You don't need to wait for the last payment to be made - and it needn't be another Mercedes .....
     
  6. st13phil

    st13phil MB Club Veteran

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    VT does apply to Agility, my wife was briefed of that fact by the dealer Business Manager when she took her SLK on an Agility agreement a few years ago.

    However, as the OP has correctly observed, the agreement is structured such that VT isn't possible until almost at the end of the term, thus making it unattractive.
     
  7. def90cars

    def90cars Hardcore MB Enthusiast

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    The only thing to look at for me is the total amount payable.
    £8900 + 36 x 550 + 18400 = 47100
    £6960 + 48 x 550 + 15050 = 48410

    You'll always owe less on the 36 month deal regardless of how and when you sell/get rid of the car.
     
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  8. OP
    OP
    petercooper

    petercooper New Member

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    Absolutely. The issue in my case is I'd actually like the car for a longer time, perhaps 5 or 6 years, but running my own business I'm also a little risk averse to lock-ins and like to have as many "easy out"s as possible (without tying up £40k of my cash in the car too, of course :cool:)

    So even if the long term total is more, if it means I can both keep the car a little longer yet retain the freedom to walk away at an earlier stage (month 38), it might be a compromise I'd be willing to make. Or maybe I should even see if a 5 year Agility is possible, although I expect the residuals could make it unattractive.

    LTD made an interesting point above though about the option of trading it in earlier which might be even better if I run the numbers on it.. :) Thanks for all the insights so far!
     
  9. LTD

    LTD MB Club Veteran

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    Yep, one of THOSE !!!
    Even more interesting if you can get a trade-in above the settlement figure and get cash back ;)

    We had Mrs. LTD's car on a VW PCP due to expire in December this year. Got a settlement figure and went car hunting.

    Traded in at £1300 above the settlement figure for a new car.

    Mrs. LTD now has a nice wee Fiat 500S as her work taxi and £1300 in her purse.

    [​IMG]
     
  10. seven

    seven Hardcore MB Enthusiast

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    As far as I am aware you can 'sell' your car at any time on agility. All that has to happen is that the 'balance' is settled. You do not have to sell to a MB dealer or even a trader.
    Have you driven an A45 for an extended time?
     
  11. OP
    OP
    petercooper

    petercooper New Member

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    No, I wanted to work out the practicalities first before taking the demonstrator. They said I could have it for a few hours when I'm ready so assuming all goes well, I could well have a fun day coming up ;)
     
  12. def90cars

    def90cars Hardcore MB Enthusiast

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    All correct.

    Just as a comment, the Fiat 500 PCPs are incredible. I bought mine and with the £500 they put in I think the total interest for 36 months was about £450.
     
  13. edstrom76

    edstrom76 Hardcore MB Enthusiast

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    Why not go for contract hire instead, 36 month ones can be had for just over £450/month (business lease). This is an average calculated figure, so over the lease you would pay a total of 450*36=£16,200. Annual mileage 10k so may work out more depending on your requirements.

    As mentioned before it works out more expensive over 48 months and PCH is no different. It makes more sense to hand the car back and take out another 36 month contract.
     
  14. edstrom76

    edstrom76 Hardcore MB Enthusiast

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    Looking at your original quote, a PCH would save you >£11k on a 36 month contract. Got to be a no-brainer.
     
  15. def90cars

    def90cars Hardcore MB Enthusiast

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    Merc Contract Hire is 6 + 35 by £519 plus VAT = £25500 ish

    Probably not to dissimilar to what you would pay on Agile when you take into account probable resale at the end (i.e. more than GMFV)
     
  16. regbuser

    regbuser Hardcore MB Enthusiast

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    @OP - if you run a business then the most income efficient way of financing a vehicle is via business lease
     
  17. def90cars

    def90cars Hardcore MB Enthusiast

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    Not 100% true.

    For me it is better to take the money as dividends/salary than pay any car related tax.

    BUT it does depend on your business/use of vehicle.
     
  18. regbuser

    regbuser Hardcore MB Enthusiast

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    a vehicle used by the business and all finance, regulatory, fuel and service costs are borne by the business can only ever be more income efficient than a privately run vehicle for which mileage is claimed back.

    and if you run a business and keep a private car also then all of the above costs are justified, there is no case for paying company car tax.
     
  19. def90cars

    def90cars Hardcore MB Enthusiast

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    There's the issue. My mileage is very low and I claim all costs against clients.
     
  20. Dryce

    Dryce MB Club Veteran

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    LOL.

    Depends on usage patterns and needs.

    The outcome of the math on this can be quite surprising these days. Particularly on nice cars with low business use.

    BIK on my car comes to higher than the cost of the lease *and* the fuel I pay to put in it. So having my employer buy the car and then give ito me would mean I'd pay more for the car - and they'd pay for the car too. Good deal for HMRC. Slightly worse deal for me. And apallingly bad deal for the company.:doh:
     
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