Private Car Leasing Deals

John D. Rockefeller once said, “If it appreciates, buy it, if it depreciates, lease it” Wise words.
Many people don’t realize the true cost of owning a car. They think its just a simple calculation, add the monthly payments to the fuel and insurance and you’re done.

New Private Car Leasing

The real cost of buying goes something like this:
We’ll assume you’re keeping the car for a 3 year period. We’re ignoring insurance and fuel as whatever way you buy your car, these will cost the same.

Option 1 Cash

If you have the cash in the bank, great, head on down to your local BMW showroom and splash the cash.

BMW X9 (New made up model!) £50,000.
The interest you would have earned per year on the money £3000 per year
The depreciation £6500 per year
Road tax 3 years @ £400 = £1200
At the end of three years you sell the car for £30,500.

The car has cost you £29,700

Option 2, HP

Same car, deposit £10,000
Depreciation £6500 per year
Monthly cost, £550 per month, £6600 per year,
Balloon payment at the end £28,000.
Road tax 3 years @ £400 = £1200

You sell the car for £30,500 and pay back the £28,000 balloon.

The car has cost you £28,500 (You made £2,500 from selling the car!)

Option 3 Lease the car

Deposit £3000
Monthly payments £500
No road tax cost

At the end of 3 years hand the car back and walk away.

Total cost £21,000.

There’s no doubt that the depreciation takes its toll, generally you’re better off leasing rather than buying.

Business users can reclaim the VAT whereas in private car leasing, they cant.