How did you source your Karoq?

[Orville]

Within the Service Information section of the infotainment system, my Karoq says next service is due at 18000miles or 710 days.

[Macdemon]

3 hours ago, Luckypants said:

 

Keh??? 

 

Don't you mean Que???

[ethereum]

7 hours ago, Panther_uk said:

Leasing my Karoq, after leasing my Octavia, got the best Lease deal off the internet and my local Dealer matched it.

 

Personally leasing seems to suit my needs, my Octavia 2.0TDi Elegance DSG was a £23,500 car, over the 3 years I owned it it cost me £9,500, final value at the end of the lease was £12,000 from VWFS, so i actally paid £2K less over the term that what the car had lost in depreciation, no brainer is you ask me.

I'm confused when people say they are getting cheap lease deals, what are they cheap compared to? Other forms of finance?

 

The lease offered is based on the OTR price. If you'd bought that outright, it'd be nowhere near that. And assuming 3 years 30k miles, it'd hold around 58-60% of it's value. So if you paid £20k and got £12k back after 3 years,  it cost you £8k. 

 

I think it's fine to lease if you want to pay a premium and have a new car every 2 years without the hassle of potential maintenance, but calling it cheap is a bit misleading surely?

 

 

[Steve335]

6 hours ago, Macdemon said:

 

Soooooooooo, how is it then Steve??

 

Or you still out driving it??  

 

No I wasn’t driving it - I was at work this morning and my wife took delivery. First impressions of the colour - I can live with it!

 

It drives ok - the start stop will take some getting used to (I’ve had it on a manual before) but it feels different in an auto. Slower to respond...

 

Erm...the radio was already tuned into 6music. Result.

 

The 1 litre is fine for most of the typical around town journeys we do - our normal week doesn’t see us travelling more than a couple of miles from home. It’s got enough response to easily get up to urban speed limits and pull away quickly at roundabouts etc.

 

Motorway cruising could be different and it might be a while before I get the chance to try it. But as that accounts for so little of my driving I don’t really care.

 

The ride is obviously high compared to my previous steeds which were C Class and Accord Estates. And various saloons and hatches before them.

 

Overall pleased with my decision I think!

 

I hope I can get another great deal in 2 years when this lease expires. For low mileage users like me leasing is ideal.

Edited 19 March, 2018 by Steve335

[nickfrog]

39 minutes ago, ethereum said:

I'm confused when people say they are getting cheap lease deals, what are they cheap compared to? Other forms of finance?

 

The lease offered is based on the OTR price. If you'd bought that outright, it'd be nowhere near that. And assuming 3 years 30k miles, it'd hold around 58-60% of it's value. So if you paid £20k and got £12k back after 3 years,  it cost you £8k. 

 

I think it's fine to lease if you want to pay a premium and have a new car every 2 years without the hassle of potential maintenance, but calling it cheap is a bit misleading surely?

 

 

 

Lease deals are not based on any price, that would be PCP, which incidentally are not based on OTR either (unless you're a mug ).

 

As explained to you earlier in this thread lease can beat depreciation and therefore discounted cash - but it doesn't always do. It depends on several variables, including the amount of "support" from Skoda (another word for discount). If you use the words "always" or "never" you'll probably be wrong when comparing cash vs lease ;-).

 

I could have paid £20k for my £22k Karoq. I preferred to pay £5k over 2 years as I think (but I am not sure as I my crystal ball is broken) that depreciation will be more than that.

 

If the car does retain 70% of its list after 2 years (which I don't think it will do, particularly if you trade in) then I am indeed £400 down compared to cash. 

 

But then again, the opportunity cost on the £20k outlay is about 2.5% (based on not paying off that £20k on your typical mortgage) so £875 over 2 years (based on £17.5k only because lease does also attract a small opp cost too of course), so suddenly I am up £475. Don't forget that the lease prices include tax so that's another £140 for the second year in there.

 

So by cheap, one may mean cheaper than actual depreciation+opp cost+tax. But if you do not integrate all the parameters, then it can appear quite counter-intuitive without doing the due diligence.

 

 

 

 

Edited 19 March, 2018 by nickfrog

[ethereum]

36 minutes ago, nickfrog said:

 

Lease deals are not based on any price, that would be PCP, which incidentally are not based on OTR either (unless you're a mug ).

 

As explained to you earlier in this thread lease can beat depreciation and therefore discounted cash - but it doesn't always do. It depends on several variables, including the amount of "support" from Skoda (another word for discount). If you use the words "always" or "never" you'll probably be wrong when comparing cash vs lease ;-).

 

I could have paid £20k for my £22k Karoq. I preferred to pay £5k over 2 years as I think (but I am not sure as I my crystal ball is broken) that depreciation will be more than that.

 

If the car does retain 70% of its list after 2 years (which I don't think it will do, particularly if you trade in) then I am indeed £400 down compared to cash. 

 

But then again, the opportunity cost on the £20k outlay is about 2.5% (based on not paying off that £20k on your typical mortgage) so £875 over 2 years (based on £17.5k only because lease does also attract a small opp cost too of course), so suddenly I am up £475. Don't forget that the lease prices include tax so that's another £140 for the second year in there.

 

So by cheap, one may mean cheaper than actual depreciation+opp cost+tax. But if you do not integrate all the parameters, then it can appear quite counter-intuitive without doing the due diligence.

 

 

 

 

 

I get you are pro leasing as you have one  but a lease is struggling to beat cash over 2 years, it's only getting worse the more months that go by. Like I say I think they are fine when you do few miles and want a new motor every 2 years, but cheap is just a bad description, you're paying for the depreciation and then some.

 

And I would have though leasing is better on a slow depreciator surely. Which the Karoq is likely to be. I think it's going to hold 70% barring a major disaster. Having just looked at a CAP HPI residuals thanks to a friend, so do the leasing firms that are sending these out on fleet. 

[Steve335]

1 hour ago, ethereum said:

I'm confused when people say they are getting cheap lease deals, what are they cheap compared to? Other forms of finance?

 

The lease offered is based on the OTR price. If you'd bought that outright, it'd be nowhere near that. And assuming 3 years 30k miles, it'd hold around 58-60% of it's value. So if you paid £20k and got £12k back after 3 years,  it cost you £8k. 

 

I think it's fine to lease if you want to pay a premium and have a new car every 2 years without the hassle of potential maintenance, but calling it cheap is a bit misleading surely?

 

 

 

To put over another argument for leasing it costs me exactly the same per month as the loan repayment and tax on my 9 year old car. Which is a higher spec vehicle but still old and unpredictable in terms of maintenance costs. It also requires an MOT every year.

 

With the lease I haven’t got the worry of unexpected and costly repairs which could easily exceed the £1200 or so deposit I paid for the lease.

 

The insurance is also cheaper on the Koraq...

 

I now have fixed cost motoring and any spare cash I can use to overpay my mortgage.

[Orville]

The list prce for my 1.5TSI DSG SE-Tech was £23,800.

 

If I had paid cash, I probably would have gotten close to £2K discount. The likely resale value after 2-years / 16K miles will be £14K-£15K, so lowest possible cost would have been £21,800 - £15,000 = £6,800.

 

The best PCP deal I was offered included a £2,300 discount with a GFV of £14,100 after 2-years. That gave a  purchase price £21,500 with 23x £323.88 monthly payments plus £2000 initial deposit. Total cost to me would have been £9,449, with roughly £2,000 being due to the 6.3% APR interest.

 

The Lease offer I signed up to required a £1555 initial payment plus 23x payments of £172.65. Total cost £5,526. That's ~20% cheaper than paying cash and ~40% cheaper than PCP.

 

2-years is probably the most attractive term for leasing, so longer ownership may close the gaps. However, 2-years is what I wanted so leasing was a no-brainer for me. I also do not have to pay for the second year's Road Fund License. It won't suit everyone, but it works for me.

Edited 19 March, 2018 by Orville

[nickfrog]

1 hour ago, ethereum said:

 

I get you are pro leasing as you have one  but a lease is struggling to beat cash over 2 years, it's only getting worse the more months that go by. Like I say I think they are fine when you do few miles and want a new motor every 2 years, but cheap is just a bad description, you're paying for the depreciation and then some.

 

And I would have though leasing is better on a slow depreciator surely. Which the Karoq is likely to be. I think it's going to hold 70% barring a major disaster. Having just looked at a CAP HPI residuals thanks to a friend, so do the leasing firms that are sending these out on fleet. 

I am pro nothing. I bought our other car cash as the lease deals were crap compared to actual depreciation (Megane RS) and conversely too, I bought my new M135i and depreciation was much lower than the lease cost.  

 

I just have an open mind and use critical thinking without any preconceived ideas and never use the word never . I only choose the solution that I think is going to be cheapest. It has worked for my first 2 leases but I might fail this time, who knows ? What other word than cheap am I supposed to use if a lease has proven cheaper than discounted cash ? 

 

As demonstrated twice now, lease can beat cash if you integrate all the parameters (not just depreciation). I think a 22k list Karoq will retail for probably £15,995 in two years, so they'll sell at £15,500 and would have paid £14k for it at best, trade. So even at £15k privately (if that's your thing) I am quids in with the opp cost and tax. I think the values will be lower than that but quite happy to be wrong, time will tell.

 

Leasing is neither better or worse on a slow depreciator as it's calculated on depreciation and therefore directly reflects it. But not the punter's depreciation, the finance house depreciation (Skoda FS for instance). They get better deals than punters, incredibly enough. For a manufacturer, leasing is very attractive as it's a discreet way of discounting with affecting values too much (remember they own the cars and will efficiently yield manage them in the network after the end of the contract). It's a guaranteed and predictable ROI for them as the penalty for cancelling are very onerous (and that's where it doesn't suit everyone, it's NOT flexible, you can't have it both ways).

 

As for CAP, they can't even predict the present, so they normally are pretty crap at the future too (you "friend" will confirm). Far better to look at the market and make extrapolations. If you look at Tiguan historical depreciation you won't be far off, that's what I used in my though process btw, as well as Yeti actual values.

 

As for mileage, it really has nothing to do with it. Any miles over 16k miles will cost me 7.2p/mile, ie far less than the first 16k miles (those will work our at 31p), so the more miles, the cheaper it gets in relative terms.

 

As I said, leasing is MASSIVELY counter intuitive - if that makes you feel better I was thinking EXACTLY like you 4 years ago and it took me a little while to get my head round it (I am no actuary though !).

 

 

 

 

 

 

 

 

 

Edited 19 March, 2018 by nickfrog

[nickfrog]

26 minutes ago, Steve335 said:

I now have fixed cost motoring and any spare cash I can use to overpay my mortgage.

 

Same or pension contributions if you're old like me as that attract a very nice fiscal bonus!

[ethereum]

12 hours ago, nickfrog said:

As for CAP, they can't even predict the present, so they normally are pretty crap at the future too (you "friend" will confirm). Far better to look at the market and make extrapolations. If you look at Tiguan historical depreciation you won't be far off, that's what I used in my though process btw, as well as Yeti actual values.

 

The data I saw came from a leasing firm who base all their prices, cars they want to lease (i.e. slow depreciators) on CAP's accuracy  I better let them know that it's far far better to look at the market and make extrapolations though. 

 

It's not counter-intuitive, it gets messy when you start throwing in opportunity cost and other parameters. I'll be sticking with buying outright though. 

 

 

[nickfrog]

11 hours ago, ethereum said:

 

The data I saw came from a leasing firm who base all their prices, cars they want to lease (i.e. slow depreciators) on CAP's accuracy  I better let them know that it's far far better to look at the market and make extrapolations though. 

 

 

Looking at the market and extrapolating is quite precisely what CAP do. If you have a better actuarial approach, I am all ears and you will be a very wealthy man.

 

11 hours ago, ethereum said:

 

It's not counter-intuitive, it gets messy when you start throwing in opportunity cost and other parameters. I'll be sticking with buying outright though. 

 

 

 

Opportunity cost is not particularly complex, a 14 year-old can work it out. The only other parameter is the £140 tax the second year as highlighted by others, which is not THAT difficult to amortise over 24 months. But to be fair, you don't even need to look at either if that's too challenging, as those early lease deals will probably beat depreciation alone.

 

I'll carry on buying outright too, but only when I think it works out cheaper than lease, that's the beauty of not having confirmation bias.

 

Edited 20 March, 2018 by nickfrog

[Yearofthegoat]

14 hours ago, nickfrog said:

 that's the beauty of not having confirmation bias.

 

But incredibly difficult not to have this, and very easy to think that you don't

 

I'm looking at getting my wife a new car (Kia Carens, she needs 7 seats now and then) but she'll keep it until it falls apart so leasing isn't attractive.

 

Like you we look at the opportunity costs, which is why our savings are staying where they are (our mortgage is at 2.5% fixed to the end of the term) and it's looking like that will remain the case with rate rises becoming more likely.

[ethereum]

7 hours ago, Yearofthegoat said:

But incredibly difficult not to have this, and very easy to think that you don't

 

I'm looking at getting my wife a new car (Kia Carens, she needs 7 seats now and then) but she'll keep it until it falls apart so leasing isn't attractive.

 

Like you we look at the opportunity costs, which is why our savings are staying where they are (our mortgage is at 2.5% fixed to the end of the term) and it's looking like that will remain the case with rate rises becoming more likely.

 

So how will you get the car if leasing isn't an option and buying outright isn't either?

[Yearofthegoat]

?

 

I meant savings aren't being used to pay off the mortgage.

[ethereum]

1 minute ago, Yearofthegoat said:

?

 

I meant savings aren't being used to pay off the mortgage.

 

Ah so you are buying outright? The way it was worded confused me.

[Yearofthegoat]

Potentially, but will look at what the finance options cost vs buying outright. She is p/exing a 57 plate Nissan Note which has done a grand total of 55000 miles. We are actually in two minds whether to keep it going for a bit longer but she wants/needs 7 seats and 10 years is long enough.

 

Kia will give £1000 towards PCP so may well take that then withdraw or pay it off straight away.

 

As for me, I've got my eye on a Kodiaq, but the Superb is still going strong at 6 years old, and it has been the best car I've owned for practicality and value for money (if there is such a thing with cars!).

Edited 21 March, 2018 by Yearofthegoat

[nickfrog]

It definitely makes sense to buy outright if you're going to keep it for 10 years, particularly if you can pocket the PCP contribution in the process ! I have done that twice and the dealer wasn't bothered that I paid off straight away.

[ethereum]

Just now, nickfrog said:

It definitely makes sense to buy outright if you're going to keep it for 10 years, particularly if you can pocket the PCP contribution in the process ! I have done that twice and the dealer wasn't bothered that I paid off straight away.

I'm going to do this most likely - out of interest did you pay within 14 days or make 1 or 2 payments first?

[Yearofthegoat]

That's a good point - there are sometimes paying-off fees and some, albeit a small amount of, interest to pay if after the 14 day cooling off period.

 

My understanding is that any deposit contribution or servicing deals gained by taking finance aren't clawed back but potentially the salesperson loses their commission.

 

We bought a Celica back in 2003 and the salesman encouraged us to take out finance and pay it off. We got a better deal and I assume he got some commission or other bonus.

[nickfrog]

6 minutes ago, ethereum said:

I'm going to do this most likely - out of interest did you pay within 14 days or make 1 or 2 payments first?

 

I paid off after 3 months as the dealer (who I know well) explained that BMW FS won't claw back the salesman's commission that way. It cost me a little bit of interest but a small fraction of the additional contribution.

[ethereum]

2 minutes ago, Yearofthegoat said:

That's a good point - there are sometimes paying-off fees and some, albeit a small amount of, interest to pay if after the 14 day cooling off period.

 

My understanding is that any deposit contribution or servicing deals gained by taking finance aren't clawed back but potentially the salesperson loses their commission.

 

We bought a Celica back in 2003 and the salesman encouraged us to take out finance and pay it off. We got a better deal and I assume he got some commission or other bonus.

 

From what I've seen it's never in the finance agreement to claw back. Probably doesn't need to be as 90%+ people who take out finance deals aren't in a position to pay it off straight away.  I guess they will lose their commission if you do it in 14 days. Guess if you do it you can always see which car the salesman has and put an envelope with 50 quid in it under the wiper 

 

2 minutes ago, nickfrog said:

 

I paid off after 3 months as the dealer (who I know well) explained that BMW FS won't claw back the salesman's commission that way. It cost me a little bit of interest but a small fraction of the additional contribution.

Think I will do it that way as the deal I have seems fair. Don't want to cost the guy a commission. Haven't worked out what the interest would be to knock off the £1500 though.

[Yearofthegoat]

1 minute ago, nickfrog said:

 

I paid off after 3 months as the dealer (who I know well) explained that BMW FS won't claw back the salesman's commission that way. It cost me a little bit of interest but a small fraction of the additional contribution.

I think that's a fair way to do it as salespeople live or die on commission. Once it comes to signing on the dotted line I'm going to just ask them outright how it works out for them if I cancel in the cooling period or pay off later. I expect they'll say pay it off later, but maybe it won't affect them either way.

[shyVRS245]

On 3/19/2018 at 18:45, ethereum said:

I'm confused when people say they are getting cheap lease deals, what are they cheap compared to? Other forms of finance?

 

The lease offered is based on the OTR price. If you'd bought that outright, it'd be nowhere near that. And assuming 3 years 30k miles, it'd hold around 58-60% of it's value. So if you paid £20k and got £12k back after 3 years,  it cost you £8k. 

 

I think it's fine to lease if you want to pay a premium and have a new car every 2 years without the hassle of potential maintenance, but calling it cheap is a bit misleading surely?

 

 

I agree spending £9,500 every 3 years would be £38,000 over 12 years which is huge compared to my Dad's last car. Vauxhall Vectra Elite Estate, which would have been £21,000 new in April 2004. He bought it as dealer demo with 7,000 miles on the clock in December 2004 for £14,150. He's just sold it for £1,150 so has lost £13,000 in 13 years at £1,000 per year.

[shyVRS245]

On 3/20/2018 at 09:04, ethereum said:

 

The data I saw came from a leasing firm who base all their prices, cars they want to lease (i.e. slow depreciators) on CAP's accuracy  I better let them know that it's far far better to look at the market and make extrapolations though. 

 

It's not counter-intuitive, it gets messy when you start throwing in opportunity cost and other parameters. I'll be sticking with buying outright though. 

 

 

Somebody will be stating that renting a house is cheaper than buying one soon!