I'm rethinking finances at the moment and my attention turns to the car.
I have a Picasso Exclusive 2.0 petrol auto in silver. 03 Reg, 26500 miles. I like the higher driving position, the tardis effect and find it very comfortable. The (2) kids like it in the back too. Having had a BMW before the Picasso, the squeaks and rattles and dodgy plastic finishes are an annoyance but not the end of the world.
I get a car allowance from work of £320 a month (after tax) and this is roughly the monthly repayment on the 5 year loan I took out to buy the car from new in March 03.
All fuel, tax, AA, servicing and maintenance is paid by the company and I pay tax on the £ value. So although fuel economy etc might not be a priority, it's all relative as I pay something towards it. Work is just about as secure as it gets with long notice period. The Picasso does about 26 mpg with urban school run/commute/supermarket and the odd weekend away.
Should I consider personal leasing instead? On the face of it I could get a decent car for less than £320/month and pocket the difference. Annual mileage would be below 10,000 as the Picasso's mileage has a couple of trips to the South of France on it that won't be happening again.
If you've read this far, thank you!
What makes/models would you recommend and what are the potential pitfalls etc of leasing? As regulars will know, I plead complete ignorance on most car stuff so do not be worried about stating anything obvious!
Do you think that half way through the loan (and it's a bog standard loan not HP) selling the car would fetch enough to pay the balance?
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I would keep what you've got. 26K miles, it's barely run in. And it's perfect for trips to France. In an ideal world it would be the HDi, but with your low mileage, 26MPG is not too bad.
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Is the reason you're thinking about changing just down to finances or are there other reasons too?
You've mentioned that both you and the kids like the car. Is it worth risking ending up with a car you don't like as much in order to save a few quid a month? If you save 50 quid a month for the next 3 years you'll be 1800 quid in profit - you should get more than that by selling the Picasso which you'll own outright by then anyway.
Life is complex; it has real and imaginary parts.
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Unless you particularly want to replace the car due to image or need, I would keep what you've got.
The loan payments are being met by your allowance, make sure you're getting the best mpg you can out of it.
The resale/trade in value will be low compared to what the car is worth to you, especially at 26000 miles.
Why not wait until the 5 year loan is over, then reassess your position? You'll own the car by then and may either decide to keep it or trade it.
Leasing schemes that I've seen are OK unless you have a change of circumstances and your mileage increases. Depending on the agreement people can get hammered on higher mileages, as it obviously affect the car's resale value.
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Keep it. You may lose money now if you sell (i.e. get less for the car than the outstanding finance), but will be some form of asset in 2008. Fuel economy is only a factor in choosing a car, not in changing. Depreciation is the biggest factor now and you have taken a hit - so stay with it.
For example - you do 10,000 miles pa at 26mpg = 385 gallons @ say £4 per gallon = £1540pa in fuel. Car going say 50mpg will use 200 gallons @ £4 = £800. Saving £740pa. Your depreciation is far worse.
Stay with it!
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Espada III - well if you have a family and need a Lamborghini, what else do you drive?
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Thanks for the comments so far.
I didn't even think about leasing when I bought the Picasso, and have heard more about it lately and wondered whether it would suit me and save money at the same time. I think that out of interest I will find out what the supposed value of the Picasso is now, but there's no desperation to change, more curiosity really.
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I'm in a kind of similar situation, but higher miles: I tend to change cars at 60,000 miles.(Avoids the expensive service, another set of new tyres, etc)
Current car is a Rover 75, which I will return under the "I've paid for half of it" rule.
Incidentally: Does anyone know what the position is regarding whether they can charge for the unusually high mileage
(It's 2 years old). Doesn't seem to be any small print, and the headline condition is that it has to have been reasonably cared for, or some such vague statement.
Regarding leasing, there are some outstanding deals available from time to time, generally on new models which the manufacturer wants to get out onto the road, purely for visibility.
I'm just now leasing for the first time, a Mercedes CLK, diesel automatic, for less than 300 per month.
Not bad, huh?
Also recall offers for a Chrysler Crossfire a couple of years ago at 100 per month.
Has to be cheap, if you're happy to take whatever happens to be available at the time!
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