How do I know a lease deal is good value?

11
Posted 8th Jan
I’ve seen lots of comments from people who regularly lease cars but I’ve never done it. Lots of talk about P11D values etc. and %s but not sure what I’m aiming for.
How can I work out if the lease I’m being offered is a good deal?
Have a quote so could provide details but really want to know how to work it out for myself. Due to sign paperwork today and having a wobble!
Thanks
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Step 1 - add up all the payments INCLUDING the final payment (the one everyone pretends never happens) and understand that number
Step 2 - Look at what you can afford
Step 3 - Look at what you actually need, not what you would like

Very old fashioned and incredibly boring. But it works if you want a happy future

I've just bought a new car and looked yet again at a lease option. I cant afford any of them when I look at how I get out of the contract.
Edited by: "ccnp" 8th Jan
If it works out at 20% less that the value of the car it's a good deal.
MonkeyMan9008/01/2020 09:00

If it works out at 20% less that the value of the car it's a good deal.


Can you show the maths please. I am genuinely interested in any loan where the total cost of all payments = value less 20%. Is 'value' the current list price, typical OTR purchase price, car value at the end of the lease?
ccnp08/01/2020 10:31

Can you show the maths please. I am genuinely interested in any loan …Can you show the maths please. I am genuinely interested in any loan where the total cost of all payments = value less 20%. Is 'value' the current list price, typical OTR purchase price, car value at the end of the lease?


Work out how much it will cost you over the lease and see what it is as a percentage Co pared to list price brand new
MonkeyMan9008/01/2020 11:08

Work out how much it will cost you over the lease and see what it is as a …Work out how much it will cost you over the lease and see what it is as a percentage Co pared to list price brand new



MonkeyMan9008/01/2020 09:00

If it works out at 20% less that the value of the car it's a good deal.



Thank you. 20% was the figure I thought I’d seen in comment sections. And I’m assuming that’s over 2 years?

I wasn’t sure if 20% was a ‘get in now’ figure or the normal cost. Quite a few seem to be closer to 25% so I thought I was working it out wrong.

I’m looking at 19.1% over two years incl. all payments/fees for the quote that I have so I guess that’s a decent deal.

Appreciate the quick response.
ccnp08/01/2020 07:41

Step 1 - add up all the payments INCLUDING the final payment (the one …Step 1 - add up all the payments INCLUDING the final payment (the one everyone pretends never happens) and understand that numberStep 2 - Look at what you can affordStep 3 - Look at what you actually need, not what you would likeVery old fashioned and incredibly boring. But it works if you want a happy futureI've just bought a new car and looked yet again at a lease option. I cant afford any of them when I look at how I get out of the contract.


Good advice. I’m always aiming to spend much less than I can afford so that works.
I need a car but not really aspirational about it and we are a small family that rarely drive far.
I dislike my current car but I liked that it was cheap to run!
I like the ease of a new car after years of ‘surprises’ with old cars.
After 8 years of PCP I’m going to give leasing a try as I don’t see myself wanting to ever buy the car at the end. I also like low up front costs so it works.
MonkeyMan9008/01/2020 11:08

Work out how much it will cost you over the lease and see what it is as a …Work out how much it will cost you over the lease and see what it is as a percentage Co pared to list price brand new


Fantastic. Which lease company do you use?
in Germany we calculate the leasingfactor

(monthly rate / listprice) * 100

If you have to pay something one time you need to add that as well

((Monthly rate + Onetime Payment) / listprice) * 100

Then you get numbers between 0.x - x.x

I dont know the averages in UK, but anything over 1 is bad in germany, anything under 0.8 is good and anything below 0,6 is very good.

But of course im sure the pricing is different in UK.

But with the leasingfactor you are able to compare different cars and different offers more neutral, basically the price comparison for leasing cars
magnetkopf08/01/2020 14:15

in Germany we calculate the leasingfactor(monthly rate / listprice) * …in Germany we calculate the leasingfactor(monthly rate / listprice) * 100If you have to pay something one time you need to add that as well((Monthly rate + Onetime Payment) / listprice) * 100Then you get numbers between 0.x - x.x I dont know the averages in UK, but anything over 1 is bad in germany, anything under 0.8 is good and anything below 0,6 is very good.But of course im sure the pricing is different in UK.But with the leasingfactor you are able to compare different cars and different offers more neutral, basically the price comparison for leasing cars


Interesting to see a different way of doing it. Based on your calculation I get 0.79 vs 19.1% on the UK calculation.
Looks like I’d be happy in Germany too.

I’ve assumed you divide the one-off costs (upfront cost + arrangement fee) by the number of months on lease before adding it to the monthly rate.

Good to have a different way to look at it but can’t imagine a figure of 0.6 on anything this way.
Edited by: "Cool-breeze" 8th Jan
Thanks everyone for the comments. I’ve signed the lease
Cool-breeze08/01/2020 20:21

Interesting to see a different way of doing it. Based on your calculation …Interesting to see a different way of doing it. Based on your calculation I get 0.79 vs 19.1% on the UK calculation.Looks like I’d be happy in Germany too. I’ve assumed you divide the one-off costs (upfront cost + arrangement fee) by the number of months on lease before adding it to the monthly rate. Good to have a different way to look at it but can’t imagine a figure of 0.6 on anything this way.


Check some of the german offers
mydealz.de/gru…ing
mydealz.de/dea…552
0.47
[Privatleasing] SEAT Leon Black Matt Edition 1,5 l TSI ACT 110 kW (150 PS) 7-Gang-DSG - Neuwagen! 121€ mtl, 24 Mon, ab 10t km, GLF 0,55
0.55
mydealz.de/dea…193
0.66

But of course we are the country of cars In general im always surprised how expensive cars are in the uk

Congratulations to you new car and enjoy
Edited by: "magnetkopf" 10th Jan
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