Personal Car Leasing

Car Leasing has for the most part been the preserve of business, a tax friendly way of providing cars within their company but more and more we see adverts for personal car leasing and these do seem inviting, so if you are getting a car that does not need modifications could it be a realistic option?

Firstly the mobility car scheme is a lease programme, in fact the single largest in Europe with 6% of all new cars sold in the UK being issued through this scheme, but is it the cheapest option?

With a personal lease you decide the period that you want the car, 1-4 years and the price you pay depends on the expected mileage, the car you choose and the period that you want the lease to run. Included in the lease is road tax, delivery and usually roadside assistance the only things you pay for are insurance and servicing, the car will have the manufacturers warranty should anything major go wrong. There is usually an upfront payment which is described for example as 35+3, this means that the lease is for 36 months (3 years) and you pay three months up front. Make sure the price includes VAT.

This is an example of a deal that we thought was competitive but there are catches, this is pretty typical, you need your wits about you:

Citroen C1 5 door 1.0 petrol VTR

  • 24 month lease
  • £83.99 per month
  • 5000 miles per Annam
  • £999 +Vat followed by 23 payments

On the face of it with an advertised price of £83.99 per month this seems too good to be true, the true cost of the lease is:

  • 23 payments of £83.99 which is £1931.77
  • Initial payment of £1198.80
  • Total payment for 24 months is £3130.57
  • Servicing costs – £300
  • Insurance Costs – £500
  • Total cost £3930.57

If you were to get the same car on the mobility scheme the cost would be £47.20 per week which over 24 months would cost £4908.80, so you can see the personal lease cheaper, £1000 cheaper over just two years. Do remember that this is based on a deal for 5000 miles per annum and you can do up to 20000 per year in you mobility car.

Personal leasing is only cost effective on the very smallest cars and you will need to have cash to put down as an initial payment, you need to sort out your own insurance and servicing and you loose your security blanket of the mobility scheme but the savings are there, just remember to read the small print.