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      07-28-2015, 11:39 AM   #1
StraightSix-d
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Seeking your wisdom on Lease vs PCP for F32 430d

Hi All,
I'm hoping that the wisdom of the crowd will help spot any glaring holes in this PCP vs Lease Deal decision for a 430d. My spec is:

BMW 4-Series Coupe 430d Luxury 2dr Auto [Professional Media]
Cost Options*:

*Harman/Kardon surround sound system
*Adaptive headlights
*Electric heated, folding and auto dimming door mirrors with memory
*Driver + passenger electric lumbar support
*Interior comfort pack
*Smokers pack
*Adaptive M Sports suspension

For the PCP deal, Coast to Coast's OTR Cost is 36,369.29 (including discount).
3 year, 36,000 mile limit on both deals.

You can see from the spreadsheet below, that, regardless of maintained or non-maintained, both deals end up around 22k amount.



So what's the benefit of going with a Lease as opposed to a PCP deal where there might be a very slim chance of the vehicle having some equity after 3 years?

Is anyone getting better lease or PCP deals than this for a 3yr/36k mile requirement on a 430d?

Note also the projected depreciation on a 430d taken from Autocar's website calculator.

Thanks!
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      07-28-2015, 12:13 PM   #2
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PCP will definitely have positive equity, they won't leave themselves short and will want you to have at least a grand deposit for a new car. If costs are tight then I would go PCP
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      07-28-2015, 12:33 PM   #3
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Quote:
Originally Posted by leon1984 View Post
PCP will definitely have positive equity, they won't leave themselves short and will want you to have at least a grand deposit for a new car. If costs are tight then I would go PCP
I disagree, there us absolutely no guarantee you will have equity in the car at the end of the deal.

I had the same dilemma. PCP worked out around 700 extra over the 3 year term. My GFV looked OK at the time and I figured it was 50/50 on the equity front. However, 18mths down the line and things look less favourable.

I think it's wise to go into PCP deals with the assumption that the GFV is going to do nothing other than protect you from negative equity and any other outcome is a bonus!
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      07-28-2015, 12:38 PM   #4
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Quote:
Originally Posted by nordberg View Post
I disagree, there us absolutely no guarantee you will have equity in the car at the end of the deal.

I had the same dilemma. PCP worked out around 700 extra over the 3 year term. My GFV looked OK at the time and I figured it was 50/50 on the equity front. However, 18mths down the line and things look less favourable.

I think it's wise to go into PCP deals with the assumption that the GFV is going to do nothing other than protect you from negative equity and any other outcome is a bonus!

+1

If anything having seen others going through the part ex, handover bit, I would say you can Guarantee you will NOT have equity in the car.

Depreciation is a killer in these, if you can get a new one with 25% discount and they are selling so many,...
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      07-28-2015, 12:53 PM   #5
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Quote:
Originally Posted by nordberg View Post
I disagree, there us absolutely no guarantee you will have equity in the car at the end of the deal.

I had the same dilemma. PCP worked out around 700 extra over the 3 year term. My GFV looked OK at the time and I figured it was 50/50 on the equity front. However, 18mths down the line and things look less favourable.

I think it's wise to go into PCP deals with the assumption that the GFV is going to do nothing other than protect you from negative equity and any other outcome is a bonus!
Didn't say there was a guarantee, you can guarantee only one thing;

BMW finance do not want to be owed 12k for a car only worth 11k. PCP GFV are overly cautious. 18 months into a PCP you will be in negative by some way, this doesn't indicate anything about the GFV.

What is your car and your GFV at the end of the 3 or 4 year term?
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      07-28-2015, 02:39 PM   #6
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Not quite your deal but with your spec and extra mileage, I'd say base monthly would be roughly 500. I'd always shop around and haggle them down - they're no different to a retail salesman.

https://www.contracthireandleasing.c...ries/55531951/
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      07-28-2015, 02:48 PM   #7
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The advantage of the PCP:

1) small chance of equity at the end of term- if you undershoot your mileage then you'd have a higher chance whereas with the lease this would be lost

2) smaller excess mileage penalty if you go over the mileage allowance with the PCP

3) no option to purchase at the end of the lease

Advantage of lease:

1) smaller impact on borrowing ability as smaller perceived liability than a PCP
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      07-28-2015, 02:52 PM   #8
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Will the 3,000 initial payment for the PCP deal be cash? If so, I would look to reduce it to nothing if you can and keep the money.
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      07-28-2015, 02:54 PM   #9
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Quote:
Originally Posted by Tengocity
The advantage of the PCP:

1) small chance of equity at the end of term- if you undershoot your mileage then you'd have a higher chance whereas with the lease this would be lost

2) smaller excess mileage penalty if you go over the mileage allowance with the PCP

3) no option to purchase at the end of the lease

Advantage of lease:

1) smaller impact on borrowing ability as smaller perceived liability than a PCP
Another couple of advantages of PCP...

4. Feels more like your car. More personal than a lease. There's a stinging feeling with my 435i that as much as I love it, it's not technically "mine"... No such issue with PCP although you don't own it outright.

5. Easier to mod. With lease, you need/should seek permission prior to modding it but need to return to stock prior to handing it back.
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      07-28-2015, 03:02 PM   #10
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Most lease deals will allow you to purchase at the end and sometimes at very competetive prices....
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      07-28-2015, 03:05 PM   #11
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You need to factor in road tax payment after the first year on PCP.
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      07-28-2015, 03:34 PM   #12
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Surely with PCP the dealer wants to sell you another car at the end of the agreement so they will want you to have equity and not be asking you for a wad of cash to make the deal work? If you had to fork out thousands each time, people would hold on to their car or view lease as a better option.
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      07-28-2015, 03:45 PM   #13
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You can't hold onto the car at the end of the PCP without making the final payment which most people cannot do without financing. That is what gets punters back into the showroom. Expecting equity after the massive discounts have been on offer could be rather ambitious
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      07-28-2015, 03:46 PM   #14
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Quote:
Originally Posted by roshambo View Post
Another couple of advantages of PCP...

4. Feels more like your car. More personal than a lease. There's a stinging feeling with my 435i that as much as I love it, it's not technically "mine"... No such issue with PCP although you don't own it outright.

5. Easier to mod. With lease, you need/should seek permission prior to modding it but need to return to stock prior to handing it back.
And another few:

6. PCP is cheaper to insure, especially if you mod the car or if you want to put a named driver on! A lot of insurers won't even quote if you say you're not the registered keeper (which you're not if it's leased)

7. Speeding and other fines which come through the post will be cheaper and easier as they don't go to the lease company first, who usually charge you an admin fee for dealing with it!

8. Far cheaper and easier to get rid of the car if you want a different car or can't afford it any more (or if you change your mind every 5 seconds like Lewis Mc )
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      07-28-2015, 03:47 PM   #15
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The main advantage of PCP over lease is flexibility. With lease you are there for the term no matter what, PCP especially if you have put in a decent deposit leaves more options.

Also in the case of an insurance total loss you will loose your lease deposit but not your PCP deposit if you have GAP cover.
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      07-28-2015, 04:49 PM   #16
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Quote:
Originally Posted by davyk31
The main advantage of PCP over lease is flexibility. With lease you are there for the term no matter what, PCP especially if you have put in a decent deposit leaves more options.

Also in the case of an insurance total loss you will loose your lease deposit but not your PCP deposit if you have GAP cover.
Not necessarily. There are get-out clauses with leases, commonly paying half of the monthlies up til end of term.
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      07-28-2015, 05:20 PM   #17
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Quote:
Originally Posted by teaston View Post
And another few:

8. Far cheaper and easier to get rid of the car if you want a different car or can't afford it any more (or if you change your mind every 5 seconds like Lewis Mc )
Echoing Teaston... Best reason to go for PCP is flexibility as I have shown with 4 BMW's in 18 months, so if ability to swap is a factor PCP is the way to go , not to mention other points people have mentioned.
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      07-28-2015, 05:39 PM   #18
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Quote:
Originally Posted by zooberoo View Post
Will the 3,000 initial payment for the PCP deal be cash? If so, I would look to reduce it to nothing if you can and keep the money.
It seems that if you reduce the initial payment, you pay more on the monthly amount. There's no escape
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      07-28-2015, 05:42 PM   #19
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Quote:
Originally Posted by Proftinkerpot View Post
Surely with PCP the dealer wants to sell you another car at the end of the agreement so they will want you to have equity and not be asking you for a wad of cash to make the deal work? If you had to fork out thousands each time, people would hold on to their car or view lease as a better option.
That's the theory. When I mentioned this to the dealer, he admitted (under unrelenting questioning by the Boss) that 'yes, if there was insufficient equity, you'd have to find the 'deposit=downpayment' for the next vehicle.'
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      07-28-2015, 06:05 PM   #20
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Quote:
Originally Posted by roshambo View Post
Not quite your deal but with your spec and extra mileage, I'd say base monthly would be roughly 500. I'd always shop around and haggle them down - they're no different to a retail salesman.

https://www.contracthireandleasing.c...ries/55531951/
Thanks for spotting this.

6 months initial payment = 2340.36
35 months = 13652.10
Total for 36 months = 15992.46
Real Monthly cost = 444.24

I'll contact them to see how my 'must have' options will increase the total amount.
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      07-28-2015, 06:30 PM   #21
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Thanks, all for your comments. The key advantages to this PCP deal seem to be:
• smaller excess mileage charge; 11.98p/mile vs 16.8p/mile
• I can voluntarily terminate the agreement after 50% of total amount's been paid off.
The common feeling is that it's extremely unlikely that there'll be any equity remaining in the car after three years.

But to counter the above, roshambo found a fantastic 3yr/10k miles lease deal for around 450/month!

A few more things to muddy the water even further.
On 12k miles/year, is it worth having a diesel or should I go for 428i or 430i? I'll still be saving on fuel bills with a diesel, but the 428i's cheaper...
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      07-29-2015, 02:05 AM   #22
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My lease is with Arval and excess is 9.84ppm (just checked this) so cheaper than PCP

The difference there between 10k mpa and 12k mpa is only effectively £196.80/12=£16.40 more per month.

Are you going to try leasing through BMW contract hire? Worth going to them with the numbers you want and haggle them down on excess mileage fee and monthly fee. Its month end, they want your business just like the retail sales chaps! If you could get an agreement for 12k mpa, 6+35, your chosen spec on a new build, excess 12ppm, £460/month (inc VAT), would you snap their hands off?

I noticed you went luxury instead of M Sport? Was there a reason for that? Just wondering as most choose M Sport for the more aggressive look
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