For a number of personal reasons, I am considering changing our purchased car to an LLD (lease car). We do about 20-25k kilometres per year (driving to UK has declined with age!) We do mostly local journeys with the occasional trip into Spain or Italy. Previous posts have referred to small print penalties if the car is returned less than perfect. I would be interested in anyone’s actual experiences. My thanks in advance!
I would too! We were considering it, but completely put off by that clause as we are not renowned for a manicured car.
So looking at the other option where you buy at the end (and presumably sell again…)
I have had two LLD cars and work for Renault. I ordered both cars before I started working there so my experience was purely as a customer.
The pros for LLD are: you usually have a service pack included in the cost of the LLD contract or it costs a nominal 1€ to add it and if it’s a good one, you only have to pay for tyres.
You can change your car as often as you like. You are not obliged to keep it for 4 years. It is better to exchange for, or buy a new car, after around 30 months especially if you are getting close to your mileage limit.
Most dealerships, if you are replacing with another car, particularly with a finance package will take back the LLD for a reasonable price so that you do not have any extra costs to pay.
You can sell an LLD car privately as long as you pay off the remaining money owed plus the balloon payment at the end.
The cons are: The interest rates. You pay a much higher interest rate than you would with a standard loan.
If you go over your mileage and are not buying another car from the garage who takes the car in, you will have to pay the extra costs.
This is also applicable to any damage. If you are exchanging rather than selling you will always get a better deal.
If you have any other questions, feel free. I am LLD microchipped
Fantastic advice- thank you! One query: you refer to the balloon payment: could you be more specific?
I actually thought that the interest rates for LDD were actually lower than classic loans, which is one of their advantages??
It’s the amount left to pay at the end of the LLD period to completely own the car. Usually a good few thousand. For my Twingo I was paying 246€ a month for 4 years and at the end I would have had to pay 7680€ to own the car plus any excess mileage.
@JaneJones unfortunately that is rarely the case but depends on the finance company you use. However leasing has to make money for the lender, who is unlikely to sell the car at the end of the term so interest rates are very high, often only 5% cheaper than a credit card. I borrowed 13000€ +/- with a monthly payment of 246€ over 4 years. At the end I would have had to pay 7680€ to own the car. I was actually only paying off about 180€ of the loan each month. The rest was interest and insurance.
My current car loan is a classic loan for 13600€. I pay 278€ a month and in 5 years the car is mine.
Obviously you may get a better finance deal with a bank but they don’t all accept a leasing option. In house finance companies are a lot more expensive.
Classic loan rates for cars tend to be around 3.8% currently with our finance company.
I can only speak for Renault as I dont know the rates with other dealers, but they must be similar otherwise we wouldn’t sell a single car. We do an awful lot of leasing as it’s the option with the least amount of hassle for companies and individuals alike.
The best option, in my opinion, is to buy an ex demonstrator vehicle which will still have a manufacturer guarantee, have less than 5000 km on the clock and sometimes as little as 200km. It will be between 3 and 6 months old and the registering garage will have taken the hit on the VAT.
Alternatively, as I now do, buy a used car that is no more than 2 years old on a classic loan, sell it before it starts costing real money, è.g. before it’s 5 years old or keep it until you send it to the scrapheap.
Both can be done on leasing but the interest will be higher than a classic car loan.
The amount you often see quoted on the TV ads is the most basic of models and the first month’s rental is usually quite high. They neglect to tell you that at the end you have to pay the rest of the car.
Every time you add an option the amounts increase.
That’s what appeals. We could just buy a new car and sell it again in a couple of years. But we are so totally uninterested in cars that we end up not bothering as long as it starts (current car is about 12 years old, last one more than that). And we now think that our needs and technology are likely to change within a few years,so the idea of a car that you can simply swap sounds quite attractive.
My first leasing was simply the only solution I had at the time. My car was all but ready for the scrapheap and I wasn’t earning enough to be able to use any other option. Leasing was a great solution.
I certainly wouldn’t knock it; the essential thing is to know exactly what you’re getting. I would say that leasing is best if you are happy to change cars every few years and you have no intention of buying any of your leased vehicles. You are basically paying to hire the car but a lot cheaper than with a rental agency.
It’s worth mentioning that there are different levels of usage that affects the price.
For example, if you take a 40,000km plan, it will be cheaper monthly but the cost of excess mileage will be higher.
However, as long as you don’t go over the total mileage within the 4 years and you hand the car back before reaching the limit, (even if it’s only 30 months in), you shouldn’t pay any extra.
Again, I’m basing this on what happens where I work. It’s always best to clarify that with your dealer.
Given our budget and, like @JaneJones, our practice of not having a “manicured” car, we came to the conclusion that an LLD wasn’t feasible for us. Our income being pensions only, this will almost certainly not support a new car every few years even if a miracle did happen and we didn’t scratch it on the local hedges
The plan we have at the moment is that we ask our lovely little local garage to look out for an appropriate car for us. My current one came from Italy, may well have been a demonstrator model, was 6 months old, goes like s**t off a shovel AND the nice garage gave me a reasonable part exchange deal on my old car which was not in the best of condition.
How does one manage to get a demonstrator if interested?
You just need to ask the garage if they have any VD (véhicule de démonstration) for sale. VD’s are registered for 2 reasons.
- Because different models need to be available for test drive.
- Because targets have to be met and if there aren’t enough customer cars available to register, demonstration vehicles are registered instead.
Most stay on the road for 3 to 6 months maximum. Some not even a month.
It’s the same system as BMW had in the UK, except demonstration vehicles had to be 3 months old with 2000km to qualify as a used car sale.
In France ownership will not be transferred to the buyer until the car is 3 months old.
Thanks DeeDee. How negotiable is the price generally?
It depends but you are basically getting a brand new car with usually, loads of options for a fraction of what it would cost you normally. If you take it on leasing, you’ll get a better deal but I wouldn’t be too picky because the garage has already taken a hit with the immediate depreciation of the car once it’s registered to them. It will all depend on each individual garage and how badly they need the sale. If you take an ex demonstrator you’ve got less room to manoeuvre because of the obligatory 3 month time frame.
If you buy a new car that isn’t immediately available but can be registered, and therefore count towards their target, they may be willing to be more generous. Again, it’s based on what I know and every brand and dealer works differently.
After an accident early this year I needed a replacement and I found a Ford Ecosport, which was a Belgium import and which drives really well. So going with Imports is a good option. The company selling the car gave a 6 month warranty. I would go that route again. So pay attention. that the seller gives a warranty!
I’m on my second italian import, often, but not always, a good way to go
I made sure the engine was clean. I see a lot of ww-cars and those are all imports in my area!
I’ve only done this the once but my car is really good - I’m pleased with it (and it had lots of warranty). Only downside is the necessity to understand Italian to work out what’s in the manual
Yes, need to point that out, that may put some off (my third language so no worries ) but I’m sure you can probably download the manual in which ever language you want