Car leasing.

[Mohican]

In lay-mans terms, what are the options open to me? I understand you can pay a fixed monthly term and at the end of the deal pay off the rest,hand the car back or take a new deal. Any explanation of the pro's and cons appreciated.

[Longines]

I'm no expert but what you've described is a PCP. A lease is more like hiring a car - you pay an up front amount, a monthly amount and then hand the car back. No option to buy, no 'equity' to take into the next car.

Pros are a new car, fixed outlay and it can be cheaper than a PCP or the depreciation if you had bought outright. Cons are you have nothing to show for it at the end and you'll need to find the up front amount for the next car.

I'm due to pick up a new car next month, first time I've leased. £380 a month all in (£2k down and £333 a month) for a £45k car seemed like a good deal. With dealer incentives etc. etc. the BMW dealer was still looking for £550+ a month for the same car on PCP.

Reading the last 20/30 pages of this thread is helpful:
http://www.pistonheads.com/gassing/topic.asp?h=0&f=23&t=1346121&mid=0&i=9160&nmt=Best+lease+car+deals+available%3F&mid=0

[DaveShoelace]

In lay-mans terms, what are the options open to me? I understand you can pay a fixed monthly term and at the end of the deal pay off the rest,hand the car back or take a new deal. Any explanation of the pro's and cons appreciated.

As Longines said, this is PCP which you are describing.

I did PCP for the first time last year and I love it. I know nothing about cars and my wife uses it more than I do for long commutes, our last car was starting to worry me it would break down on her. PCP worked out perfect for us because we get a brand new car with a warranty, so we have very little anxiety about it breaking down etc. I worked out that the amount I would generally pay every three years for a new car and repairs was the same/less than what I am paying with PCP, so for a non-car savvy type I love it.

Plus the whole building up equity thing means hopefully I'll always have new/ish cars, which is a nice thought.

If you know your stuff with cars, IMO you are probably better off getting finance and looking for a good deal. But if you are a 36 year old bloke who still describes them as 'red ones' then I'd recommend it.