Member Since: 19 Apr 2007
Location: Cumbria
Posts: 315
Contract Hire a D3
Hi,
I've done a search and cannot find any posts on contract hire in here.
I'm looking at sourcing a D3 TDI HSE for personal/business use.
I am currently considering cash purchase and then the pain of disposal in 2 or 3 years before the warrantly runs out.
Alternatively, I have shopped around and the deals on offer with Personal Contract Hire look pretty attractive, with a 3-23 profile with 10k/year coming in at under £600/month plus VAT.
This works out at £18330 over the two year period on a £40k+ car, but without the massive outlay of £40k+.
Not quite sure on the depreciation expected on the new car, but I would be suprised if the D3 would be worth much more than £26k (cash price) as a two year old model with 1 year of warranty left. Book price today for a 2 year old HSE on Ebay (!) seems to be about £30k.
Am I missing something?
What are the downsides to contract hire, over the cash purchase route?
I have not done Contract Hire before but it is looking like a good choice, with ralatively low risk.
Any thoughts?
Many thanks
JC
19th Apr 2007 5:32 pm
ronp
Member Since: 29 Nov 2006
Location: North Yorkshire
Posts: 15263
Have you looked at LR's purchase options?
ie deposit, monthly payments, hand back /pay final amount.
It's mileage related secifically to your needs.
Speak to Ryan at Lakeland LR.
Also, why just keep it for 2 years?
Granted you'd do that with a normal 'fashion icon' car, but not a classic vehicle that does not date as quickly?
Take it at least for 3 years, you'll then have the option to keep it longer or opt out.
oh and welcome ...first post I see!...... always on the road less travelled 🚧
19th Apr 2007 6:28 pm
SN
Member Since: 03 Jan 2006
Location: Romiley
Posts: 13710
And you can always reduce the cost of LR's "high" APR by putting down a big chunk (sourced from another lender at a better rate, if you need to)Steve N | 21MY Defender | 08MY Discovery 3 (history) | 06MY Discovery 3 (ancient history)
19th Apr 2007 6:49 pm
Gareth Site Moderator
Member Since: 07 Dec 2004
Location: Bramhall
Posts: 26774
I got a pcp. 10k deposit, 600 per month for 3 years, 16k gfv (final payment) 26k miles per year.
I'm sure better deals are available now, as I got my car at launch, so no deals to be done really.
I will not be handing it back at the end, I will certainly be paying the final lump, as I have gone over miles a tad!
I've got my new HSE on a 'unregulated lease purchase agreement'.
£6,000 deposit, £660 1st payment, then 47 x £555 and final balloon payment of £15,375.
At any time you can sell the car (as I am currently doing) and there is no mileage restrictions. It's more flexible that some other forms of finance. I've purchased many cars & vans using this method.
I got this deal through the dealers own finance division, as it was much easier to do the handover when they are sorting out the finance in house. You have to haggle with them though, as they do cut the finance charges down if you haggle. They finally virtually matched what I was offered elsewhere.Matt
19th Apr 2007 7:53 pm
jc_uk
Member Since: 19 Apr 2007
Location: Cumbria
Posts: 315
Hi again,
I have looked at the dealer finance route and I don't think it is great.
I also had a quote from a LL dealer for contrcat hire and that came in at over £1000/month on a 3-35 profile for 10k miles/year!
(I have not had much luck talking to local dealers - one when I entered the dealership told me bluntly they were shut about 30 minutes before the advertised clsoing time on the door - they have since apologised in a letter after a call to LL Customer Service.)
Both examples in the replies work out at a total payment of almost £48K over 3 and 4 years for a £44k car, which can probably be quite heavily discounted, down to £40/42k or even less according to some of the posts I have read in here.
The car at the end of 3 years is probably worth approx. £20k, so 3 years ownership will have cost £28k, approx. £9300/year, which is marginally more than the £9165 with the contract hire route.
The downsides of this finance route are also:
1. Substantial deposit up front
2. You have a car to sell before changing
3. Road fund licence has to be purchased yearly - included with contract hire
4. You have the car longer (this may actually be a +ve)
The point I'm trying to make to myself is that the contract hire route you get a
new car on a two year swap for less than financing a car through deposit and loan arrangement
5. You are tied in to buy the car at below market value or you loose the money you have 'invested'
through the deposit and the payments, probably £5k-£8K if my sums are right, and you are then
a car dealer again arguing over trade values.
6. Additional payment for extended warranty required for year 4 onwards
(after the bad experience I have had with my 5 series BMW Touring I will never have another newish
car out of warranty again)
Have I missed any?
In the past I have always bought new/nearly new cars and changed then within 4/5 years, always taking a heavy hit on value. After doing the sums on contract hire I think this is the way I will finace my next car.
The way I look at this the rental payments cover the depreciation of the vehicle value over the rental period, whithout having to 'invest', at risk, in the future value of the vehicle.
I like the Discovery D3 but I would prefer to drive an in warranty vehicle rather than a 5+ year old model waiting for all it's toys to break - When is the D3 refresh due, or perish the thought the D4
Have I missed something in my sums?
Anyone see any downsides with the contract hire route, except that you never actually own the vehicle.
Many thanks
JC
PS excellent forum
Ordered my day tent from Nick at Yeovill LL yesterday
We already have a couple of Khyam tents and they are pretty good quality.
£135 ish for the tent and tunnel is a reasonable deal.
LL £400+ rrp is a bit imaginative!
A lot of people contract hire now. As you say, you don't own the car, but that doesn't really matter anyway if you are going to sell within or at the end of the finance term?
One disadvantage of contract hire is the mileage limitations and charges for excessive mileage. I do 25,000 miles per year, so lease purchase works out cheaper for me. Also contract hire isn't flexible. If you decide to change after 12 months (you loose your job for example and take an income cut) then with other forms of finance you can sell the car and then settle the outstanding finance.
I see many businesses with cars in their car parks that are unused for months - either because employees have gone and they are left paying hire charges on a car that has no use for them or because the mileage is too high and they're not using them to get the mileage back down.
Saying that, the excessive mileage charges are much less now than they used to be.Matt
19th Apr 2007 9:26 pm
Gareth Site Moderator
Member Since: 07 Dec 2004
Location: Bramhall
Posts: 26774
Mine is 9p per mile.
19th Apr 2007 9:32 pm
ronp
Member Since: 29 Nov 2006
Location: North Yorkshire
Posts: 15263
jc_uk, I think your looking for a Discovery 3 [with respect] for all the wrong reasons - PRICE!!
It's never going to be the cheapest vehicle.
But most of us buy it for another reason - because it's a Discovery 3 - to heck with the costs!!
I'm sure once you have one, you'll agree.
Ownership of a Discovery 3 is like no other vehicle!
Permagrin from day 1.
Mine is over 2 years old with 71k and I've no plans whatsover to change.
And I used to change my vehicle every 2 years and couldn't wait to do it....... always on the road less travelled 🚧
19th Apr 2007 10:20 pm
jc_uk
Member Since: 19 Apr 2007
Location: Cumbria
Posts: 315
Hi again,
I'm looking to change to a D3 as it is the ideal vehicle for my needs - 7 seats, awesome towing, 4x4 offroad, etc. and the HSE is a wicked spec car.
Originally I was looking at a LR 110 DoubleCab, but the D3 for more money wins hands down on spec.
(A 110 DC is still on my shopping list for playing in the woods, but that will have to wait for now, and I will probably go for an old model and keep forever.....)
As I said in my earlier post I want a D3, but I don't want to be driving the same car in 5 years time waiting for the toys to break - and the D3 HSE has a lot of toys......
I decided I want one, but I now need to find the best (ie lowest cost) of paying for it.
From the maths I have done Contrcat Hire looks the best option in terms on monthly cost and depreciation of the assett - I have never owned a car that has gone up in value over my period of ownership.
Looking for a 110 DC for playing in? Join the queue...... Tim110 and DomH are looking for one for Morroco and I'm looking to replace the L200 with one later this year too.
And welcome on board. 8)I know it's not considered "kind" to say no these days, but no. Just no, ok? And if it's not ok, still no.
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