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Is it a good idea to buy the car you have been leasing?
Normally at the end of a vehicles contract hire term the finance company will arrange to collect your car, they do not generally offer the car for sale. You can however ask them for a price for the car but will the price at which they offer it to you be a bargain?
Usually not, what they generally do is check the retail and the trade price of the vehicle, offering it to you at somewhere between the two. Why do they not offer it to you at the trade price? Simply because you are not a trade buyer and they want to get as much as they can for the vehicle.
Often the driver's interest in acquiring their contract hire vehicle is for a car for his or her partner, or one of the children to drive. However if they are not prepared to offer the vehicle to you at a particularly attractive price is it worth buying? Well it is certainly an advantage knowing the history of the car; knowing for example that it has never been in a serious accident and that it has been driven carefully and that any bodywork repairs were carried out at the main agent.
Although they should not, it is not unheard of for the hirers of contract hire vehicles to have damaged bodywork repaired at a local garage rather than the main agent. Sometimes this can affect the anti corrosion warranty. If the finance company becomes aware of this on the vehicles return, it can be costly for the hirer.
So how do finance companies dispose of cars when they come to the end of their term? The auctions is where most are sold, some finance companies have their own sites where traders can go and bid on vehicles, even EBay is used by some companies nowadays.
Of course if you wanted to buy your own vehicle at a potentially lower price, which you almost certainly would if they are disposed of through the auctions, you would have to know where that particular company disposes of their cars, which would be difficult.
You could consider going to an auction and buying an ex lease vehicle, although it wouldn't be the same as buying the vehicle you have been driving for the past two or three years and its warranty probably would have expired, which makes it rather more risky than buying the car you know.
Furthermore auctions are really for trade buyers. Trade buyers will spot things that a private buyer may not. Whilst some companies will put their ex contract hire cars through the auctions with "no major mechanical defects" others will sell them, "bought as seen". This doesn't mean that they think there is anything wrong with the car but there could be. If a vehicle is sold with no major faults it can be rejected if it proves to have something major wrong with it but only within a limited time frame.
Private buyers can often be seen paying far too much for cars, as they get carried away with excitement of the moment. Trade buyers know what they want to pay for a car, that's not to say that they don't sometimes get tempted in to paying a little more but not too much more. Whereas private buyers sometimes can't seem to stop bidding and auctioneers have been known to take "bids off the wall", this is where a very enthusiastic private bidder, who is clearly not going to stop bidding, is bidding against a non existent bidder.
Buying an ex lease car can be quite a good idea. They are generally in reasonable condition, the mileage is usually correct and it will have been serviced at the correct intervals. Of course if you can buy one that has just come off a twenty four month term, even better; with most manufacturers but not all, you will still have one year unexpired warranty and usually the option to extend it.
Its always best to make sure that the service history is up to date when purchasing an ex lease car; if there were a service overdue or missed you would expect this to be checked when the vehicle was returned but errors are made and of course the manufacturer is unlikely to honour the warranty if the vehicle has not been serviced properly. If you are able to buy the vehicle you have been driving for the past two or three years, that would always be your safest option.
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