Lease, agility or....

[scottydee]

Having had dreadful bad luck with my first ever MB, I'm already thinking of the options for my next car.

Had a look at lease options and the "agility" seems a good deal, but having never a)had a brand new car, and b) never leased or financed a car, I'm worried about overlooking any potential pitfalls.

Can anyone offer any advice?

The option of trading the car back agains a new one at the end of the period appeals, but there must be something I'm missing?

 

[juux]

I've done the HP thing before, but am in the same position regarding PCP, albeit I've pulled the trigger on it now so we'll see how it actually pans out!

In terms of monthly payments it can't really be beaten.

As long as the MGFV/balloon payment covers what you put down on the car then you should be set to do the same thing in 2/3 years for equivalent money.

Of course there are horror stories out there about people getting reamed on trade-in value/repairs at hand back, but it's too popular a finance vehicle for that to be the norm.

At the end of the day the dealership wants to put you in another car at the conclusion of your deal so it's not in their best interests to make it difficult or too expensive.

 

[scottydee]

How does the trade in work? What happens to the value of the car at the end of the deal if you're going for another vehicle with them?

 

[juux]

How does the trade in work? What happens to the value of the car at the end of the deal if you're going for another vehicle with them?

The idea is that the dealer offers you something on the car which is (slightly?) higher than the balloon payment. This is used as deposit on the next one.

The only problem I see with this is the dealer is in control of what they are prepared to offer. They could just quote the balloon figure in which case you've effectively lost whatever deposit you put down, although like I said their motive is to get you into another car, so...

I've friends who have been on PCP deals for years without any issues, but I guess it does depend on a few things:

• The dealer in question
• The spec/condition of car
• The prevailing market conditions

There are a few good guides around, e.g. Personal Contract Purchase - Auto Trader UK - Features - News and Reviews Hub

 

[snail]

The option of trading the car back agains a new one at the end of the period appeals, but there must be something I'm missing?

Think of it as borrowing the money for a couple of years - that's effectively the difference between Agility and regular finance. It works out cheaper per month because you don't have to pay back the capital cost of the balloon payment (but you are paying more in interest charges because of this).

When it comes to the end of the agreement you always have the choice to pay the money and walk away if you don't like the deal on offer. I did that a while back on an Audi. I went for a small balloon payment and put away the equivalent monthly amount in an ISA. The dealer offered me a rubbish deal so I just paid up and sold privately instead!