Lease deals v keep current car - advice please

Page may contain affiliate links. Please see terms for details.

recardo

Active Member
Joined
Aug 15, 2005
Messages
64
Location
Ayrshire
Guys,

I'm looking for some informed and sound advice based on peoples experience of lease deals v own a car.

Apologies in advance for the long post - but I think background & detail is important.
Here's the scenario: I currently have a 2007 petrol BMW* 525i (3.0) which is paid off this month so I own it outright. The BMW so far is totaly reliable, powerful, petrol and does 34 - 36mpg, I get 26p/mile for business use.

There are some very tempting lease/hire deals on new mercs out there from leasing companies- Class saloons and estates for under £300, C class coupes and E class saloon for around £300 (diesels, personal contract hire inc VAT, no maintenance).

I'm considering going for a c-class c250 cdi amg auto on a 24 month contract, (6+23 x £302, total rentals approx £8758) or e-class 220 cdi SE auto for approx 6+23 x £289.

My thinking is as follows and heres where I need a sanity check:
1) Sell my BMW and have £8k - £10k in the bank, use / invest / squander on other things.
Absolutely nothing wrong with BMW - its a fantastic car, but has no warranty, so if anything does go wrong, I have to pay for it. Not looking at BMW deals as they are significantly higher than merc!
and
2) Lease hire a new merc diesel, its brand new (never had one) in warranty for lease period, should be 40+mpg (although only 18p/mile from work). at end of lease find another deposit and start again.
or
3) Trade in BMW for nearly new merc, finance balance (higher monthly payments) but have an asset at the end to trade in again once merc is out of warranty?

Which is the sensible money route?

* I moved to BMW after a bad experience with a 05 Merc C200 CDi sport estate - turbo & injectors failed, MPG was dire at 34mpg, it was slow and unreliable... not the best experience....
 
How many miles do you do?

What are the current payments for the BMW (I know they are ending)?
 
My only experience is from my wife's PCP which has yet to start (though obviously we thought it a good idea) but I recommend if you haven't already done so, that you check base specs and cost any options you need. We found it would have been surprisingly easy to clock up another 50% on top of the base 24mths rental, and if you only keep the car 2yrs many of the options are relatively expensive (negligible residual value). You could find your BMW's sales proceeds spent faster than you'd like.
 
How many miles do you do?

What are the current payments for the BMW (I know they are ending)?

i do approx 10 -12k
payments are £250

My only experience is from my wife's PCP which has yet to start (though obviously we thought it a good idea) but I recommend if you haven't already done so, that you check base specs and cost any options you need. We found it would have been surprisingly easy to clock up another 50% on top of the base 24mths rental, and if you only keep the car 2yrs many of the options are relatively expensive (negligible residual value). You could find your BMW's sales proceeds spent faster than you'd like.
happy with standard specs
 
its a fantastic car, but has no warranty, so if anything does go wrong, I have to pay for it.

This logic is often a fallacy. If nothing goes wrong in a new car you are *paying for it* through depreciation.

OTOH how much does a car actually cost to keep going via an independent specialist?

If you lease a new car at £300/month with a deposit of say £5K then over three years that's ..... just under £16K.

Now what's the likely maintenance cost of keeping your current car for 3 years. Sure in a worst case the dice could roll against you but in realistic terms maybe £2K or £3k tops if you're unlucky and more likely £1K or less.
 
I lease or PCP cars as I enjoy getting a new car every 2 years without any worry about trade in values and rarely needs much maintenance. The one thing to be aware of is damage beyond wear and tear, kerbed alloys etc.
 
If your current BMW is OK, then keep it. Depreciation will be relatively small, and you know how good/bad it is.

You may get a surprise with unexpected repairs, but you may not. Put the proposed payments into a savings account for repairs, and show a profit if the car doesn't break...

PS this is good, valid advice I give myself, and promptly ignore......
 
Looking at Parkers, I reckon that the cost (i.e. depreciation) of buying a 1yo and trading after another 2 yrs will be around £7.5-8.0k, so perhaps £10 a week less than the lease. However, if you estimate loss of YOUR interest @ 3.0% pa, the additional capital tied up in the purchase option could cost you on average £5 per week, so the lease option might only be £5 per week more in real terms- for which you get a new car v. a 1yo. The lease figures you have appear very good indeed.

But, as others have said, the most financially sensible option would be to keep your current car.
 
I'd die of boredom if I had to keep the same car for 3 years.

It depends what is important to you. If its just money then keep your car.

If you enjoy new shiny things and variety, then new shiny tiy it is!! :) life's too short y'know.
 
This logic is often a fallacy. If nothing goes wrong in a new car you are *paying for it* through depreciation.

OTOH how much does a car actually cost to keep going via an independent specialist?

If you lease a new car at £300/month with a deposit of say £5K then over three years that's ..... just under £16K.

Now what's the likely maintenance cost of keeping your current car for 3 years. Sure in a worst case the dice could roll against you but in realistic terms maybe £2K or £3k tops if you're unlucky and more likely £1K or less.

Everything he said plus you could always buy an extended warranty. There are plenty out there that would cover the expensive drive train bits.

But then again, there is nothing like getting a new set of wheels.
 
I'd die of boredom if I had to keep the same car for 3 years.

It depends what is important to you. If its just money then keep your car.

If you enjoy new shiny things and variety, then new shiny tiy it is!! :) life's too short y'know.

This is it!!! nothing wrong with BMW, great car and economical for 3.0 petrol 23 -34mpg avg. Never had a brand new car of my own before, hence the lure of a new lease merc for £50 more per month than my just paid off loan (£250/month).

Keeping the BMW may cost me little more than petrol and servicing for a while yet. But I like to change cars :doh:, and a 2yr lease would work for me.
I might go and see if I can test drive a merc and see what Merc can offer in terms of lease etc incomparison to the deals on t'interweb.

One thing that niggles though is Merc diesel mpg, having experienced poor mpg in a w203, various posts here show W204 and w212 diesel owners dissapointed with mpg which is only a couple more mpg than what I'm getting with BMW.... someone tell me the 220CDi and C250 CDi can average 45 or more!
 
If under 60k miles the full warranty on a 525i is around £45 a month.
Warranty issue out the way.

Do you want a new car?
Yeah, then contract hire a new C250cdi sport on one of the silly deals. Just under £300 a month including vat or on personal.

If you can live with another 2 years in the BMW you will save around £8700 in hire costs.

Fuel at 16k miles a year.

BMW costs you £216 a month at 34mpg and you get back £325.
So £90 towards insurance, tax, tyres, servicing.
You can also claim tax allowance on the extra 19p per miles your company should be paying you (another matter).
Saving you £95 a month. So hope your company accounts department is at least doing that for you?

Merc c250cdi will return 45+ is you are getting 34 from the 525i.
So will take £176 worth of fuel.
19p per mile means you get £237 back, so you are left with only £61 to cover insurance, tax, tyres, servicing.
However, you can claim back the tax allowance on the difference between 45ppm and the 19p they are giving you(who the f**k is this company paying 19p per mile btw?!).
Saving you £130 a month in tax.


So the diesel is not actually cheaper in this case, and that is before you take into account the £8700 it will cost you to hire a new C250cdi.
£1800 deposit and 23 x £299.


So it really comes down to this...

Is £8700 worth getting into a new 4 cyl diesel for over the next 2 years?
 
In this instance I'd keep the Beemer if it's sound and reliable. Pay the £250 a month or so into premium bonds for two years.

In two years time, see what you feel like with £6000 cash plus any lucky draws!
 
But then you'd be missing the new car smell, the feel good factor driving it, the involuntary glance back as you walk away from it.

I'd spend the weekend test driving stuff if I was in your position. If you don't feel the urge to get a new car the you're clearly at the age where you consider your car a mere appliance (like some here) and should run it for the next 20 years under bangernomics rules as its the most cost effective thing to do.

Let us know how it turns out :)
 
The 'new' E350 V6 CDi with the 7G+ gearbox does 50mpg for fun, I got over 55mpg on quite a few occasions and I'm not very light footed.
 
SPX said:
The 'new' E350 V6 CDi with the 7G+ gearbox does 50mpg for fun, I got over 55mpg on quite a few occasions and I'm not very light footed.

Agreed it is a delightful car to drive: silky smooth and satisfyingly quick. Also significantly more refined than the 4 pot diesels - could you cope with the move from a v6 petrol to one of these which are undeniably a bit noisy? Personally I could not - I get enough of that in SWMBO's A4

I must say SPXs fuel economy figures are better than I have seen - best I have got is 47 mpg by cruising below 60mph but life is too short. I get about 42 at a steady 70, 35 at 85-90 (on the autobahn).
 
I get 26p/mile for business use.
...
(although only 18p/mile from work).

Just in case - you are claiming the tax back up to the HMRC 45p/mile for 10K miles rate, aren't you?

If you do drop to the 18p rate, you'll be able to do the same up to 25p for mileage over 10K.
 

Users who are viewing this thread

Back
Top Bottom