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MarkyB

Car Leasing

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As we all know house prices have suffered since Northern Rock problems in June 2007. No great surprise that was coming to us on this site. As a result, down the road we have had massive reductions in interest rates. Add in a bit of quantative easing, and some huge discounts for buyers of new cars, and a VAT stimulus via cut of 2.5% to help the economy and make things cheaper.

Overall effect on second hand cars is to smash the residual values quite a bit lower.

Effect on leasing, you would think with 0.5% interest rates would be cheaper cars

Yes... for a period... except now, they are FAR more expensive than they EVER was.

Thats why I got my car at 228 per month on a 2 year 10,000m lease 10 months ago.

right now, with the same company on the same terms for basically exactly the same car, its double... yes its now 460 per month.

Amazing... YES... but why double?

This looks across the board on MOST cars, with what looks like relatively few exceptions.

I asked the leasing company's why, they said becuase of the abysmal residuals...

Oh well, i wont be renewing mine come 14 months time at these rates.

Hopefully, in terms of timing, I will get the housing market right too.

ANyone else noticed this? is this just a blip or what?

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As we all know house prices have suffered since Northern Rock problems in June 2007. No great surprise that was coming to us on this site. As a result, down the road we have had massive reductions in interest rates. Add in a bit of quantative easing, and some huge discounts for buyers of new cars, and a VAT stimulus via cut of 2.5% to help the economy and make things cheaper.

Overall effect on second hand cars is to smash the residual values quite a bit lower.

Effect on leasing, you would think with 0.5% interest rates would be cheaper cars

Yes... for a period... except now, they are FAR more expensive than they EVER was.

Thats why I got my car at 228 per month on a 2 year 10,000m lease 10 months ago.

right now, with the same company on the same terms for basically exactly the same car, its double... yes its now 460 per month.

Amazing... YES... but why double?

This looks across the board on MOST cars, with what looks like relatively few exceptions.

I asked the leasing company's why, they said becuase of the abysmal residuals...

Oh well, i wont be renewing mine come 14 months time at these rates.

Hopefully, in terms of timing, I will get the housing market right too.

ANyone else noticed this? is this just a blip or what?

Could this have anything to do with gordons new car taxes? You have to pay a new car tax, and the higher fuel bands aswell?

If a few people click on this link, i'm sure ling will appear and give us some inside info! :P

http://www.lingscars.com/

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Second hand car values are being driven up through lack of new cars being sold.

A family member sells cars for a large car leasing/rental firm and they can sell second handcars at better prices than at any point in the recent past.

No new sales = shortage in second hand supply. Simple.

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I keep looking at old BMW 740's from pre 2001, and their prices have dropped 30% over 6 months.

Just can't bring myself to get one as fuel's predicted to spike to 1.50/2.00 a litre next year.

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I am dealing with a lease car (BMW 630i) as executor of an estate.

The car is worth around £19K on the open market. BMW want £21K as settlement to take it back but I can pay less than £2k more in payments and give it back for free.

So I am just going to leave it rotting for 8 months.

What a waste.

VMR.

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As we all know house prices have suffered since Northern Rock problems in June 2007. No great surprise that was coming to us on this site. As a result, down the road we have had massive reductions in interest rates. Add in a bit of quantative easing, and some huge discounts for buyers of new cars, and a VAT stimulus via cut of 2.5% to help the economy and make things cheaper.

Overall effect on second hand cars is to smash the residual values quite a bit lower.

Effect on leasing, you would think with 0.5% interest rates would be cheaper cars

Yes... for a period... except now, they are FAR more expensive than they EVER was.

Thats why I got my car at 228 per month on a 2 year 10,000m lease 10 months ago.

right now, with the same company on the same terms for basically exactly the same car, its double... yes its now 460 per month.

Amazing... YES... but why double?

This looks across the board on MOST cars, with what looks like relatively few exceptions.

I asked the leasing company's why, they said becuase of the abysmal residuals...

Oh well, i wont be renewing mine come 14 months time at these rates.

Hopefully, in terms of timing, I will get the housing market right too.

ANyone else noticed this? is this just a blip or what?

Do you mind me asking what model was over £460? :blink: On smartlease.com (no awards for web design of course) you could lease a BMW M3 for about £540 a month. About the same as a mortgage on a pokey flat but will get you laid a hell of a lot more.

A new Golf was about £180 for a 1.4 which would struggle to pull the skin of a rice pudding but a 1.9TDI was about £220. Reasonable I thought. :ph34r:

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Here I am :) Did someone whistle? Hahaha.

Well, that is a very sweeping statement (that prices have doubled). Of course that is rubbish (except in some specific case).

What has happened (yawn) is that the economy crashed. Lending has got much harder, less balance to lend and tighter underwriting. Car prices have been going up and down like a yo yo. Car factories have been shutting and re-opening, stock has either been dumped or scarce, maybe a couple of hundred dealers have gone bust, finance policies realigned, some companies withdrawn from the market.

But... hey-ho, it's a level playing field and I am seeing a big increase in proposals.

For instance, just one month ago I sold a few of these and grabbed one for myself:

New Audi TT Roadster 2.0 TDi (172bhp) Quattro 4WD Convertible 2dr 1968cc (Diesel, Non-metallic, Manual) with Heated front seats for just £273 a month inc vat, on a 2-year deal, just standard 3+ initial payment, no doc fees.

Now, that is cheap!

There are dozens of very cheap cars out there. I show below my top 35 best selling models over the past 30 days, with numbers attached. I remove prices so I cannot be accused of selling. Note these are not all shi**y little cars! There is plenty of meaty stuff here.

top35.jpg

So, while some cars have gone up, many have gone down. The market has many bargains. Some leasing companies have gone pop, the industry is contracting. But, not me :)

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Do you mind me asking what model was over £460? :blink: On smartlease.com (no awards for web design of course) you could lease a BMW M3 for about £540 a month. About the same as a mortgage on a pokey flat but will get you laid a hell of a lot more.

A new Golf was about £180 for a 1.4 which would struggle to pull the skin of a rice pudding but a 1.9TDI was about £220. Reasonable I thought. :ph34r:

a V8 M3 (even a saloon) for £540 (plus VAT) on a 3+36 deal ? Are you sure. That seems silly cheap. I thought they were £800 to a grand dependent on spec ?

It's a £52K car with any sensible spec on it to buy, even with a discount.

Given it's likely to be worth £25K tops in 3 years, then either they are buying them at £33K (to make any profit and to cover their own financing costs) - £540 a month or the lease price is wrong...... I just don't see how they can do it at that price without an enormous initial payment or balloon at the end..... (and I'd want it up front !).

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Hi Ling! I was just browsing your website while you were posting and I must say that yer prices didn't seem much higher than a couple of years ago.

Shame that the Nissan Qashqui is your third most popular car- stupid hatchback-on-stilts rubbish :(.

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The husband got this finance quote the other day:

Finance Type:Hire Purchase With Balloon

Finance Term:48

Vehicle:ASTON MARTIN V8 VANTAGE COUPE 2dr

Vehicle Cost:£ 46,950.00

Net deposit:£ 10,000.00

Balance to Finance:£ 36,950.00

Monthly Payment:£ 610.58

Final 'Balloon' Payment:£ 16,132.00

Apr:8.2%

Doesn't seem unreasonable for what it is, but doesn't seem a good time to be doing this sort of thing to me...currently trying to persuade the husband of that :ph34r:

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Don't quite know what this explains but I was under the impression lease prices were based on depreciation. So a higher lease price would mean companies are expecting higher depreciation.

Obviously being of a bearish nature this is exactly what I would expect

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Guest DissipatedYouthIsValuable

I went to Ling's cars and bought a lemon.

Terrible man. Worse than a banker.

And that website of his? Jesus ******ing Christ. My eyes!

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I keep looking at old BMW 740's from pre 2001, and their prices have dropped 30% over 6 months.

Just can't bring myself to get one as fuel's predicted to spike to 1.50/2.00 a litre next year.

Convert it to LPG - I've done this with last three cars and never had any problems. Dealer claimed it would devalue car but if you do loads of miles I think it's going to be negligible. Saves buckets on fuel and means I can fill up from the forklift tank at work for convenience.

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Guest DissipatedYouthIsValuable
Ling's a woman.

She was a mad oriental lady on Dragon's Den. She was about 23!

Damn. That's ruined my reputation for critical acclaim.

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Convert it to LPG - I've done this with last three cars and never had any problems. Dealer claimed it would devalue car

LPG conversion devaluing a pre-2001 740i? Pfft. Double its value more like :).

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Are you sure that TT tdi quattro roadster is £270 a month ?

http://www.lingscars.com/Audi/TT_Roadster-...tract-hire.html

Or am I missing something ?

looks more like nearer double that, if I read it right ?

It's not that price NOW, it was THEN. So, I jumped and got one for meeeeeeeee. It lands end of August. Dog-coc-k Red, as they say in the trade.

My point is there are lots of bargains, but you have to jump. There are some people who just study prices forever looking for cheaper, but never commit.

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It's not that price NOW, it was THEN. So, I jumped and got one for meeeeeeeee. It lands end of August. Dog-coc-k Red, as they say in the trade.

My point is there are lots of bargains, but you have to jump. There are some people who just study prices forever looking for cheaper, but never commit.

I understand. I have mates like this - they then moan because the next deal is not as good as the one they missed....... I take it you are now at the point of dealing with importers, rather than just dealer groups ? Either way, a TT tdi Q cab for that money is an absolute steal...... even if it is DCR.

It was like when Fiat were knocking out Puntos for £82 a month over 12 months (no advance and inc VAT to retail punters) - you'd be mad not to take one - it's cheaper than the bus.

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I understand. I have mates like this - they then moan because the next deal is not as good as the one they missed....... I take it you are now at the point of dealing with importers, rather than just dealer groups ? Either way, a TT tdi Q cab for that money is an absolute steal...... even if it is DCR.

It was like when Fiat were knocking out Puntos for £82 a month over 12 months (no advance and inc VAT to retail punters) - you'd be mad not to take one - it's cheaper than the bus.

No, no, I never deal with any importers. All my cars are new UK stock from proper UK franchised dealers. My TT is coming from Northampton Audi (but then I do order about a hundred cars a year from them). The car has been built and it is sitting waiting to jump on a boat.

By me doing something (selling and administering customers) far more efficiently than any dealer (and better I think), dealers can supply cars much cheaper, achieve targets, model mix etc etc without distressing the local market. :) It is a virtuous circle. Everyone saves money.

Can't always do miracles though :) Agree that when cars are cheap, they are cheaper than the bus. What a mad country.

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No, no, I never deal with any importers. All my cars are new UK stock from proper UK franchised dealers. My TT is coming from Northampton Audi (but then I do order about a hundred cars a year from them). The car has been built and it is sitting waiting to jump on a boat.

Sorry, by importers, I mean the official importer - in this case Audi down at Milton Keynes..... - the grey import route is the motorpoint and trade sales favourite - complete with the most clueless (sometimes deliberately I suspect) 'salesmen' ever

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I am dealing with a lease car (BMW 630i) as executor of an estate.

The car is worth around £19K on the open market. BMW want £21K as settlement to take it back but I can pay less than £2k more in payments and give it back for free.

So I am just going to leave it rotting for 8 months.

What a waste.

Do the terms allow you to sub-let it?

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The answer:

Leasing companies made a reasonable profit that had to predict 'residual' price accurately. If they got it wrong they could lose cash (bigtime).

So when oil prices rose the large cars they were leasing (with greater profits) nosedived in there residual value (bad fuel economy you see). After a while there was no point being in the market as cars just lost money with their residual value being below the predicted when the lease expired. They pulled the deals.

After a while oil dropped but recession set in and the companies haven't returned, too risky and unpredicatable.

Until the market stabilises its an idiots game to compete. You can't reasonably predict a 3 or 5 year residual value when you don't know oil prices or the economy (defaults) for even the next six months. Sure second hand cars plummeted then suddenly rocketed. Values of used cars can actually be more than new (go figure but its the truth). Shortage of used cars.

We live in a mad mad world. But its fun.

EDIT - in answer to original question about relationship to house prices - no direct impact, general economy only might be a link.

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Helpfully, I have made a page detailing the UK New Car Sales Statistics (these are the figures that car manufacturers don't like you to see).

You can select any manufacturer and see the sales stats, compare them all, compare the overall sales and compare last month 09 with last month 08. It is amazing how few cars some of them sell.

If you look at that joke MG operation in Longbridge, they have never got out of double figure sales per month and I wonder how they survive and pay the bills... what money is paying the workers? Some others like Cadillac have had months where they have only sold 1 car in a month.

Companies like Renault have shown massive drops. It's all very interesting.

http://www.lingscars.com/uk_car_sales.php

sales_statistics.gif

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a V8 M3 (even a saloon) for £540 (plus VAT) on a 3+36 deal ? Are you sure. That seems silly cheap. I thought they were £800 to a grand dependent on spec ?

It's a £52K car with any sensible spec on it to buy, even with a discount.

Given it's likely to be worth £25K tops in 3 years, then either they are buying them at £33K (to make any profit and to cover their own financing costs) - £540 a month or the lease price is wrong...... I just don't see how they can do it at that price without an enormous initial payment or balloon at the end..... (and I'd want it up front !).

Rachman,

That's what the site said and that was about 2 months ago. I'm as sceptical as you but I didn't phone because even if it was £400 a month it was still out of my price range.

They had a Honda Civic Type R for less than £200 as well. Hard to believe I know but surely they can't advertise that if they couldn't produce the goods.

Of course now I'm in the market for a car, there is f*ck all around for anywhere near that spec for that price. Looks like I'm going for a second hand Golf.

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