Lease pricing static?

[ktrax]

Hi all,

First off, I've never leased before but have been looking at personal leases for an S3 since about June time, yet have been disappointed to see that prices haven't budged much from around £435pm all-in (24 months) at the cheaper-end of the market, with no options ticked.

Anyone got any insider knowledge, or even just pure gut feeling on potential movements in prices for the coming months? I thought I understood supply and demand, but clearly I wasn't being realistic when I assumed prices would be at the £400pm mark with a couple of good options ticked at this stage

Don't get me wrong, I'll probably end up taking the plunge regardless, but if prices were to lower towards the end of the year I'd bite then.

Any advice appreciated.

 

[Schuey]

Hi all,

First off, I've never leased before but have been looking at personal leases for an S3 since about June time, yet have been disappointed to see that prices haven't budged much from around £435pm all-in (24 months) at the cheaper-end of the market, with no options ticked.

Anyone got any insider knowledge, or even just pure gut feeling on potential movements in prices for the coming months? I thought I understood supply and demand, but clearly I wasn't being realistic when I assumed prices would be at the £400pm mark with a couple of good options ticked at this stage

Don't get me wrong, I'll probably end up taking the plunge regardless, but if prices were to lower towards the end of the year I'd bite then.

Any advice appreciated.

Lease price has little to do with supply & demand at the start. Although this will affect the future value of a car which would be its residual value (estimated) at book price (trade) for the end of lease period. (High volume car = higher depreciation) This is driven by some manufacturers giving massive incentives to lease companies with as much as 30% off list in return for volume. Volume reduces unit cost for manufacturing.

Given that lease companies get significant discounts they can base their prices on list & not actual cost price.

So your monthly lease rate is calculated as a whole life cost which includes depreciation, maintenance, RFL plus some admin & profit.

Any damage above fair wear & tear is chargeable to you at the end which can affect the residual value & some companies may aim to make a profit on this as well. You would also be charged for excess mileage although no rebate for lower than lease mileage.

After return your car would then be re-marketed with the sale proceeds going back to the lease company less disposal costs.

Now although the S3 is relatively low in depreciation, it is still an expensive car, so if it retained 60% in 3 years that is still a minimum of £12K to recover in 3 years. This is equal to £330/month depreciation over the term based on list price (ish). Maintenance could be £100/month based on approx Audi plan rate then add RFL @ £15/month & you can see how the figure builds up.

The difference between cost price & list price is essentially the profit for the lease company plus some admin fees, wear & tear & some lower than expected mileages.

There is a bit more to it (adding optional extras etc) but hopefully the above sets things out.

 

[A3_Rider]

Tbh going down the lease route the Golf R is still a much better deal than the S3.

I wanted the Golf R initially, I mean 260 inc vat for 2 years is an irresistible deal but I was too late and fell for the S3.

The Golf R is a bit more now but still value for money.

 

[veeeight]

In 23 months there is going to be a glut of low spec Glof R's flooding the market ......

 

[Schuey]

In 23 months there is going to be a glut of low spec Glof R's flooding the market ......

Agree, surprised how VW can have such a higher predicted % value for the R than the S3.

The lease companies will be pretty hard on people for anything not classed as wear & tear so there will likely be some bills on top. Additionally a lot of people took the 5K pa to meet the lease criteria knowing they would exceed this & most likely in the 1st year as well.

 

[royalsteve68]

yep the golf r was a lease bargain at 261/month on a personal lease with 10k miles or 225/month on a 5k lease - check my post on www.hotukdeals.com

it may have been expired now, but you can still get a pretty good deal in a business lease that's lower than this

 

[ktrax]

Thanks for the replies, all.

Schuey, your post does indeed help me appreciate the actual cost of such a car - I'd never bothered to work out the depreciation cost on a monthly basis, never mind the extras. Though that maintenance price you put forward seems very high. I suppose this shows that in order to make a profit, which they always will, there is a limit as to how far prices can drop under normal circumstances (unless they have a glut to shift).

Probably was a bit daft to expect a £30k+ car to become much more affordable. As for the Golf R, it's now hovering about £50pm less than the S3 on a personal 2yr lease, as far as I've seen. I would always go for the S3, because of what the car means to me personally.

If I can talk them down to ~£400pm, I think I would take that. I only do 4-5,000 miles a year, so it's not a huge amount to ask.

Thanks again.

 

[Schuey]

Thanks for the replies, all.

Schuey, your post does indeed help me appreciate the actual cost of such a car - I'd never bothered to work out the depreciation cost on a monthly basis, never mind the extras. Though that maintenance price you put forward seems very high. I suppose this shows that in order to make a profit, which they always will, there is a limit as to how far prices can drop under normal circumstances (unless they have a glut to shift).

Probably was a bit daft to expect a £30k+ car to become much more affordable. As for the Golf R, it's now hovering about £50pm less than the S3 on a personal 2yr lease, as far as I've seen. I would always go for the S3, because of what the car means to me personally.

If I can talk them down to ~£400pm, I think I would take that. I only do 4-5,000 miles a year, so it's not a huge amount to ask.

Thanks again.

Just had a look at some prices & with a 6 month deposit a 24 month lease is £335+VAT which would bring the price in @ £400/month. This is based on 8K/pa.

 

[cuke2u]

As I've stated before, base it on 5k if you don't plan to hand the car back at the end of the finance period. You can still P/X the car even though the mileage might be over and not get penalised. I have a deal with 5k and only done 3.5k since January...

 

[Schuey]

As I've stated before, base it on 5k if you don't plan to hand the car back at the end of the finance period. You can still P/X the car even though the mileage might be over and not get penalised. I have a deal with 5k and only done 3.5k since January...

A bit mixed up here dude, the OP wants to lease the car, don't think the lease company would be too happy if he tried to part ex it at the end of the lease

 

[david7m]

Where are you looking? I had a quick look in to this option a few months back and was recommended these - http://www.freedomcontracts.com/
You need to check regularly though, as flash deals come up really cheap. I didnt see it and apparently it was moved pretty quick, but the Golf R was up for £180+vat per month.

Does anyone know what you need to qualify for business rates? Could I say i own "David7m Consulting" and qualify, or do i need company register numbers etc.?

Dave

 

[auroan]

Does anyone know what you need to qualify for business rates? Could I say i own "David7m Consulting" and qualify, or do i need company register numbers etc.?

Dave

Vat registration. Business rates are just prices without VAT.

 

[Schuey]

Where are you looking? I had a quick look in to this option a few months back and was recommended these - http://www.freedomcontracts.com/
You need to check regularly though, as flash deals come up really cheap. I didnt see it and apparently it was moved pretty quick, but the Golf R was up for £180+vat per month.

Does anyone know what you need to qualify for business rates? Could I say i own "David7m Consulting" and qualify, or do i need company register numbers etc.?

Dave

This is where the bubble burst a few months ago, VW caught onto the fact that some lease companies were setting customers up on business leases instead of personal leases. They would claim they person was a sole trader but VW have now clamped down on this & lease costs have increased.

If you did decide that you wanted to set up a small business & had some headed paper & a bank account then there is nothing to stop you.

 

[david7m]

Business rates are just prices without VAT.

There is something else - if you take the "Mercedes C Class Coupe C180 CGI Sport AMG Manual" as an example, the difference between Business and Private is more than 20%. Business deposit is £1647, plus 20% is £1976, private £2246. Per month - £183, +20% £220, private £250.

You would need to be VAT registered to claim it back, but still slightly cheaper than the private route if you didnt.

Dave

 

[cuke2u]

A bit mixed up here dude, the OP wants to lease the car, don't think the lease company would be too happy if he tried to part ex it at the end of the lease

Oopsss

 

[ktrax]

Just had a look at some prices & with a 6 month deposit a 24 month lease is £335+VAT which would bring the price in @ £400/month. This is based on 8K/pa.

Thanks for looking, Schuey. That's a good bit lower than I'd seen. Where did you find that offer, please? Googled that price but couldn't find it.

If I took that deal @ 8,000 miles pa and only did 10,000 over two years, that should also give me some equity for my next car.

Another option I had been considering over the past few months was buying a second-hand M135i for about £22,000, but I'd figured it would cost me at least the equivalent of £350pm anyway (depreciation, tax and servicing etc.), so that lease deal would beat that idea hands down. I guess a third option would be waiting until used S3's can be bought for ~£25k next year, while still benefitting from warranty.

Would I be short-changing myself if I leased an S3 with no options? Any must-haves? My head spins with all of these choices

 

[david7m]

Have you looked on my link?
Dave

 

[ktrax]

Yes Dave, there is a pretty good Golf R deal there, but no S3 deals at all. I have been sort of tempted in the past to get the R, being that's it's much the same car, but I know I'd regret it.

 

[david7m]

Fair enough, maybe worth a call !
Dave

 

[Schuey]

Thanks for looking, Schuey. That's a good bit lower than I'd seen. Where did you find that offer, please? Googled that price but couldn't find it.

If I took that deal @ 8,000 miles pa and only did 10,000 over two years, that should also give me some equity for my next car.

Another option I had been considering over the past few months was buying a second-hand M135i for about £22,000, but I'd figured it would cost me at least the equivalent of £350pm anyway (depreciation, tax and servicing etc.), so that lease deal would beat that idea hands down. I guess a third option would be waiting until used S3's can be bought for ~£25k next year, while still benefitting from warranty.

Would I be short-changing myself if I leased an S3 with no options? Any must-haves? My head spins with all of these choices

Adding options to a lease car is more of a comfort/convenience/enjoyment option, I'd probably go standard with a few home comforts, possibly tech pack but then if you're not doing a lot of mileage do you really need these things?

Rule of thumb would be aim for the highest standard spec you can get, which for the S3 isn't that bad in fairness, yes the R is cheaper & higher spec but then the R is not really what you want....!

Waiting for a used S3 for £25K will probably be another 12 months with a standard spec or higher mileage and any payments would be pretty similar to the lease deals (£5K deposit 36 months at £380ish plus a balloon) so what are you really gaining?

Overall it comes down to affordability, so if the £400 is within your budget it's an option, just check what the buy out costs would be at mid point in case you changed your mind.

 

[david7m]

For anybody else, Golf R on my link, 1800 down and 200 per month over 2 years.
Dave

 

[ktrax]

Good points there, Schuey. I would probably have to go sans options because of how much they add to the cost. I was meaning to pay cash for a used S3, which I suppose 'saves' a little bit of money, though would leave a gaping hole in my bank account. All just idle musings, with no real conviction either way.

And Dave, all I can say is wow. That's an unbelievable deal, and shows the premium people pay for the Audi badge (myself included). That R deal works out at about £270pm all in.

Is the S3 worth £1,500 more a year? Sort of a rhetorical question, but I don't know what to do. So tough to decide.

 

[david7m]

1500 is a lot of money! Does that mean I should look at Seat for there equivalent, then Skoda lol
The timing isn't right for me and I've always paid cash in the past, but things are different now and seriously tempted with a lease....
Dave

 

[ktrax]

lol, I quite like the Leon Cupra, but the interior can't match the other two.

I've always paid cash too, but I currently drive a 58 plate A3 2.0 TFSI and with the money I've spent on repairs in the last two years as well as all other running costs, it probably works out at the same as that R lease deal. I'm so tempted that I can see myself applying this weekend if I'm not careful.

Surely I can't regret it if I'm only paying that a month? lol

 

[david7m]

Maybe I shouldn't have piped up lol

Maintenance plan extra ......

Dave