Car Leasing Deals
Posted on 06. Jun, 2010 by admin in General
In this article we will look at the costs of leasing a car and compare it with the costs of purchasing one. These costs are approximations, and car leasing deals are agreed in detail between the dealer and the customer, however the figures that we present here should at least provide you with a guideline on the relative costs.
Here we will consider a top of the range Ford Kuga car, the 2.5T 5 door automatic which costs £27,250 including all the extras that we have chosen. It is usually possible to get a good deal when buying a new car, so we will assume that we can negotiate a real price, the price that we would normally pay, of £26,000.
Next we need to look at how many miles we expect to do and that time that we wish to keep the car. Once we have these, then the next step is to determine how much the car will have depreciated in value during the course of the lease.
Car depreciation is not linear. Firstly it is very steep during the first year of registration; it then flattens off considerably for successive years. If we assume that we will do 12,000 miles a year and that we will keep the car for three years, then by the end of your three the car will be worth about £8,000.
With a Ford leasing deal, we are compensating the dealer for the value depreciation of the car. After the leasing period we return the car and the dealer sells it on in order to recoup the value that is still retained in the car.
Leasing this car for a three year period would cost approximately £660 a month including VAT.
If we took out a car loan to finance the purchase of a new Ford Kuga it would cost us approximately £860 a month assuming that we own a home. Thus our monthly outgoings are reduced by £200 a month. Over a year the is £2,400 and over the three years of the contract is £6,200, which is a massive saving.