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Home > General > Best way to purchase? Contract Hire?

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gavink

Member Since: 07 Oct 2012
Location: UK
Posts: 10

Thanks for the input folks.
I am just trying to weigh up my options. When I bought my coupe last year I honestly believed I had been quite smart and had minimised the depreciation, but when I look at what I stand to lose I am surprised and this is where CH is at least worth me asking about.
A 2010 model HSe is what, around £35K, and a 2009 model is around £26k? So I would stand to lose around £10k in 12 months?
This is obviously cheaper than CH but there are higher risks and more work involved, ie selling on..... 325d m sport coupe looking to change to RRS

Tue Oct 09 2012 1:21pm

rrsboy

Member Since: 06 Jan 2009
Location: UK
Posts: 1391

2010 Range Rover Sport TDV8 HSE Santorini Black

the other slight benefit of cash is liquidity - you can dump it at a moments notice rather than with 1 month (or more)

and a tiny, rarely used one - collateral

============
2010 TDV8 HSE - ooo laa laaaaaaaaa
2007 TDV8 HSE - superb car and very reliable
============
2012 - dearly departed, sadly missed.. to return in late 2013 with a new TDV8!

Tue Oct 09 2012 1:29pm

x5pea

Member Since: 03 May 2007
Location: Lanarkshire
Posts: 2097

2010 Range Rover Sport 3.0 TDV6 HSE Santorini Black

ChrisP wrote:
Still don't agree and don't think having a pop is on to be honest, just the way I prefer to do it having tried just about every option before.

Im not having a pop, we are debading the pros and cons.

Im sorry but irespective of how you justify it paying 41.5k to a leasing company over 3 years for a 53k car with a few services and some tyres is mental IMO.

Tue Oct 09 2012 1:39pm

x5pea

Member Since: 03 May 2007
Location: Lanarkshire
Posts: 2097

gavink wrote:
Thanks for the input folks.
I am just trying to weigh up my options. When I bought my coupe last year I honestly believed I had been quite smart and had minimised the depreciation, but when I look at what I stand to lose I am surprised and this is where CH is at least worth me asking about.
A 2010 model HSe is what, around £35K, and a 2009 model is around £26k? So I would stand to lose around £10k in 12 months?
This is obviously cheaper than CH but there are higher risks and more work involved, ie selling on.....

Your comparing two completely different models.... If i lost 10k in 12 months on a 3 year old RRS i think id be buying a focus instead,.

Tue Oct 09 2012 1:41pm

Ady 555
Site Moderator

Member Since: 12 Dec 2010
Location: Good old yorkshire
Posts: 8738

2012 Range Rover Sport SDV6 HSE Santorini Black

^^^ RS focus at that one of the lowest depreciating motors at the moment.

Tue Oct 09 2012 1:50pm

gavink

Member Since: 07 Oct 2012
Location: UK
Posts: 10

LOL ok, so if I bought this for example, http://www.autotrader.co.uk/classified/adv...?logcode=p

Land Rover Range Rover Sport 3.0 TDV6 HSE 5dr CommandShift Diesel Estate 2010.. £35,995

What would my expected depreciation be in 12 months?

x5pea wrote:

Your comparing two completely different models.... If i lost 10k in 12 months on a 3 year old RRS i think id be buying a focus instead,.

325d m sport coupe looking to change to RRS

Tue Oct 09 2012 1:53pm

muddywheels
Milk Float Man

Member Since: 30 Jun 2010
Location: East Riding of Yorkshire
Posts: 5637

You could use this http://www.whatcar.com/car-depreciation-calculator/ has a guide or look at autotrader for prices a year older

I stopped buying new some years ago and now buy nearly new then usually change at end of warranty - it has always been cheaper than leasing for me - especially being unable to claim back vat and being employed by my own limited company

I can also free cash without big penalties if my circumstances change Wanted a Series 2 LR since childhood but previously owned MY16 Disco Sport HSE TD4 Auto, MY13 RR Sport Black Edition TDV6 Auto, MY10 RR Sport HSE TDV6 Auto, 2007 Freelander 1 Freestyle TD4 Soft Top, 2009 Freelander 2 GS TD4 Auto, 2007 Freelander 2 GS TD4, 2004 Disco 2 Metropolis Auto, 2002 Disco 2 GS, 2000 Freelander 1 SE TD4 SW

Still hoping for a S2 one day!

Last edited by muddywheels on Tue Oct 09 2012 2:10pm. Edited 1 time in total

Tue Oct 09 2012 2:04pm

Ady 555
Site Moderator

Member Since: 12 Dec 2010
Location: Good old yorkshire
Posts: 8738

Pea will be sifting through his little black book as we type
That looks a decent motor for the price, depending how bad the winter is when you decide to sell i'd guess you'd lose around 6k if the mileage doesn't go upto the moon in the next 12 months. All depends if you sell private, or px to the trade, then you will lose 10k

Tue Oct 09 2012 2:07pm

drdelrrs

Member Since: 02 Nov 2010
Location: UK
Posts: 1163

2012 Range Rover Sport 3.0 TDV6 HSE Lux Orkney Grey

Just remember with any contract hire the vehicle is never yours so you must maintain and keep it in good condition and to factory specs. No changing wheels or any other modification etc.

When you return it the car will be assessed and ANY item they find, scratch, stain to interior etc will be put right at your cost. IF you did not get the car inspected before you handed over the keys you will have no proof as to whether the company is pulling a fast one. You will be charged for removing any items you fitted; e.g. roof rails, tow bars etc that were not originally on the car.

Over many years I've seen 'driver responsible ' costs for valetting, additional miles, tyre knicks, paint scratches, cleaning to remove dog hairs, smoker smells, worn steering wheels and gear lever knobs etc; these charges can reach into the thousands; £2k to £3k is not that uncommon especially if it involves upholstery.

Which option is cheapest will depend on buying power and investment interest compared to borrowing interest.

This is NEVER a "free lunch" and if you use someone elses cash you will pay a price for it and the risks they take.

Tue Oct 09 2012 2:39pm

RRSTDV8

Member Since: 12 Aug 2011
Location: Northamptonshire
Posts: 8987

2012 Range Rover Sport SDV6 HSE Orkney Grey

muddywheels wrote:
You could use this http://www.whatcar.com/car-depreciation-calculator/ has a guide or look at autotrader for prices a year older

D4 HSE loses c.£4k in the first year, RRS HSE loses c.£11k in the same year! 2012 SDV6 - it's missing a couple of cylinders
2008 TDV8 - it was a labour of love and is much missed

Tue Oct 09 2012 3:21pm

rrsboy

Member Since: 06 Jan 2009
Location: UK
Posts: 1391

x5pea wrote:
Im sorry but irespective of how you justify it paying 41.5k to a leasing company over 3 years for a 53k car with a few services and some tyres is mental IMO.

really?!? ============
2010 TDV8 HSE - ooo laa laaaaaaaaa
2007 TDV8 HSE - superb car and very reliable
============
2012 - dearly departed, sadly missed.. to return in late 2013 with a new TDV8!

Tue Oct 09 2012 6:20pm

ChrisP

Member Since: 26 Jan 2008
Location: Derbyshire Dales
Posts: 1392

2011 Range Rover Sport 3.0 TDV6 HSE Santorini Black

Whichever way the car is financed there is very little difference in total costs incurred whether it goes to a CH company or lost at the rate of £1K/month in depreciation either way after 3 years and 60K miles and the VAT youre left with nothing to show.
If you decide to keep for another 2 years and a further 40K miles it only gets worse I know I tried it with my E320cdi Avantgarde which starting costing 1K every service and when I finally chopped it in got about £4.5K back . MY2011 HSE Santorini/Ivory/Piano Black/Privacy Glass/TV .Sadly gone.
Audi A5 Sportback Black Edition 3.0 tdi quattro S Line

Tue Oct 09 2012 8:19pm

rrsboy

Member Since: 06 Jan 2009
Location: UK
Posts: 1391

but if x5pea's numbers are correct, then what you say isn't right?

a 53k car does not lose 43k of value over 3 years? it'll still be worth around 25k

============
2010 TDV8 HSE - ooo laa laaaaaaaaa
2007 TDV8 HSE - superb car and very reliable
============
2012 - dearly departed, sadly missed.. to return in late 2013 with a new TDV8!

Tue Oct 09 2012 8:25pm

pjb

Member Since: 04 Mar 2008
Location: Sunny Oxon
Posts: 213

drdelrrs wrote:
Just remember with any contract hire the vehicle is never yours so you must maintain and keep it in good condition and to factory specs. No changing wheels or any other modification etc.

When you return it the car will be assessed and ANY item they find, scratch, stain to interior etc will be put right at your cost. IF you did not get the car inspected before you handed over the keys you will have no proof as to whether the company is pulling a fast one. You will be charged for removing any items you fitted; e.g. roof rails, tow bars etc that were not originally on the car.

Over many years I've seen 'driver responsible ' costs for valetting, additional miles, tyre knicks, paint scratches, cleaning to remove dog hairs, smoker smells, worn steering wheels and gear lever knobs etc; these charges can reach into the thousands; £2k to £3k is not that uncommon especially if it involves upholstery.

Which option is cheapest will depend on buying power and investment interest compared to borrowing interest.

This is NEVER a "free lunch" and if you use someone elses cash you will pay a price for it and the risks they take.

I think the biggest reason many use CH as we do is we do not have to take the risk on residuals when getting cars for our staff.

Vans we buy as we run 6 or 7 years dependant upon mileage & have serviced at an independant so costs are lower & CH companies discount residuals on vans to next to nothing.

We use Lex they get much bigger discounts than I can ever get as a company buying 18 cars, they get cash cheaper & get bigger discounts on servicing & tyres than I can ever get.

Yes they make a management charge & get rebates from suppliers, but get a few quotes & then negotiate on the lowest one then go back to your preferred & try & do the same deal.

As for the point above yes agree 100% that you can get ripped off if not astute.

The BVRLA guide is very clear, I spend between £200 & £400 per vehicle having the car prepped, alloys filled & sprayed & scratches either polished out (often using coloured polish) or filled & sprayed with a body shop & we never get any recharges.

Leasing companies use the recharge route as a profit centre if people are stupid enough to send vehicles back without ensuring they are in an acceptable condition ! Paul

L405 Loire Blue
Swift Conqueror 645
Abarth 500c

Wed Oct 10 2012 6:33am

ChrisP

Member Since: 26 Jan 2008
Location: Derbyshire Dales
Posts: 1392

rrsboy wrote:
but if x5pea's numbers are correct, then what you say isn't right?

a 53k car does not lose 43k of value over 3 years? it'll still be worth around 25k

But unless you pay cash out of taxed income the £53K car costs considerably more including finance charges of say £5K so about £58K if it ends up worth £35 K that's a drop of £23K so about £640/month just in depreciation.
At a residual of only £25K for a high miler like mine that increases to £916/month!
I'm sure somebody far more knowledgeable than me can do a comparison with some real figures on outright purchase vs CH.
Very few large companies buy cars now they are all of balance sheet on CH are they all "mental" too ? MY2011 HSE Santorini/Ivory/Piano Black/Privacy Glass/TV .Sadly gone.
Audi A5 Sportback Black Edition 3.0 tdi quattro S Line

Wed Oct 10 2012 7:04am

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