GTI+ Lease ending - Buy or hand back?

Chat about your 2018+ AW/BZ model Polos here!
TGGTI
New
Posts: 12
Joined: Thu Aug 26, 2021 2:01 am
Drives: GTI 2019
Location: Leeds

GTI+ Lease ending - Buy or hand back?

Post by TGGTI »

Ok it’s not until June next year. But some cars are on a 1 year waiting list…

Will be 3 yrs old in June 2022. Mileage will be approx only 7,500 by then

Currently paying on lease £271pm (3mth upfront fee was £813 that’s now history)

My questions are….

1) Do I buy it outright if possible?
2) Extend the lease if possible?
3) Lease a new car?

Would really appreciate advice. Thanks
Stuart_Rendall
Bronze Member
Posts: 185
Joined: Sun Sep 20, 2020 9:46 pm
Drives: Polo GTI+
Location: Derby

Re: GTI+ Lease ending - Buy or hand back?

Post by Stuart_Rendall »

TGGTI wrote: Thu Aug 26, 2021 3:29 am Ok it’s not until June next year. But some cars are on a 1 year waiting list…

Will be 3 yrs old in June 2022. Mileage will be approx only 7,500 by then

Currently paying on lease £271pm (3mth upfront fee was £813 that’s now history)

My questions are….

1) Do I buy it outright if possible?
2) Extend the lease if possible?
3) Lease a new car?

Would really appreciate advice. Thanks
Extend the lease or lease a new car unless they can guarantee a value that isn't stupidly inflated. Out of curiosity, why didn't you PCP the car? I have a GTI+ decently spec'd and I paid a 1k deposit and pay ~£290 a month. Selling now after a year and a half and i'm about 4k in positive equity, car is worth more than I bought it for and its done 14.6k miles.
SRGTD
Bling Bling Diamond Member
Posts: 3508
Joined: Sun Oct 11, 2015 9:40 pm
Drives: 2020 AW Polo GTI+, Pure White.
Location: UK

Re: GTI+ Lease ending - Buy or hand back?

Post by SRGTD »

Difficult to predict what the state of the new car market will be like in 9-10 months time. However, if the current semiconductor shortage issue has improved and manufacturers are able to increase their car building capacity, then waiting / lead times should have reduced.

I’ve never leased a car before. However for me, option 1 would be heavily dependent on what the lease company would want to charge you to buy the car outright. If you like your car and the cost to buy is reasonable, then it’s worth considering. With option 2, I’ve read on other forums that lease companies sometimes increase the monthly payments if the lease is extended beyond the original term, so a big consideration for me would be how much any potential increased monthly payment would be compared to the current monthly payment.

With option 3, the state of the new car market at the time your current lease is coming to an end is a major factor, so it’s worth keeping up to date on developments so you’ll know whether the timing of leasing a new car of your choice to coincide with the end of your current lease looks feasible. If it isn’t, then buying an old(er) cheap, low depreciating car to tide you over for a few months until your new lease car arrives is worth considering as a forth option. If it’s old enough to be a low depreciator, you should be able to recoup most of the purchase cost when you sell it on.
monkeyhanger
Bling Bling Diamond Member
Posts: 2643
Joined: Fri Feb 23, 2018 9:58 pm
Drives: Audi A4 Avant Quattro 40 TDI, Polo GTI+
Location: Newcastle upon Tyne

Re: GTI+ Lease ending - Buy or hand back?

Post by monkeyhanger »

The current used car prices aren't going to last, that's a fact. Once new cars have reasonable lead times again, the nearly new prices are going to tumble. No one is going to buy a 1 year old car for the same price as a new one.

The main beneficiaries here are those that manage to sell their old car for inflated money without paying over the odds for a new one. It's amazing how quickly the market changes - in April and May, we got our ID3s for DTD beating prices, 1 in stock and one built and on its way. Those same dealers would probably be able to sell them easily without any discount right now.
Andy Beats
Bling Bling Diamond Member
Posts: 2012
Joined: Tue Nov 13, 2018 1:12 pm
Drives: Nissan Leaf 40KW (and Polo United)
Location: aberdeen

Re: GTI+ Lease ending - Buy or hand back?

Post by Andy Beats »

My advice is get a settlement figure now and sell now.
Pocket the equity and get something else early.
Andy Beats
Bling Bling Diamond Member
Posts: 2012
Joined: Tue Nov 13, 2018 1:12 pm
Drives: Nissan Leaf 40KW (and Polo United)
Location: aberdeen

Re: GTI+ Lease ending - Buy or hand back?

Post by Andy Beats »

monkeyhanger wrote: Thu Aug 26, 2021 8:07 am Once new cars have reasonable lead times again,
When will that be though?
Toyota just announced this week that their new car production is being cut by 40%.
Same issues as everyone else.
monkeyhanger
Bling Bling Diamond Member
Posts: 2643
Joined: Fri Feb 23, 2018 9:58 pm
Drives: Audi A4 Avant Quattro 40 TDI, Polo GTI+
Location: Newcastle upon Tyne

Re: GTI+ Lease ending - Buy or hand back?

Post by monkeyhanger »

Andy Beats wrote: Thu Aug 26, 2021 12:17 pm
monkeyhanger wrote: Thu Aug 26, 2021 8:07 am Once new cars have reasonable lead times again,
When will that be though?
Toyota just announced this week that their new car production is being cut by 40%.
Same issues as everyone else.
No one knows for sure, but I'd guess 6-12 months. If I had a car I was looking to chop in for a new one in 6-12 months, I'd consider placing that new order now and locking in that inflated p/x price, because this bubble is going to burst, with people currently paying 15% more for their used car than they would've done 6 months ago.

For Toyota it's an easy decision to make - lay off the temps, put permanents on reduced hours for the same money (they'll love that) or put them on training in downtime. The othe big plants/marques will be doing the same while a parts shortage curtains their car building capabilities.

JIT supply usually suits the car manufacturers, but this time it's bitten them in the arse.
TGGTI
New
Posts: 12
Joined: Thu Aug 26, 2021 2:01 am
Drives: GTI 2019
Location: Leeds

Re: GTI+ Lease ending - Buy or hand back?

Post by TGGTI »

Stuart_Rendall wrote: Thu Aug 26, 2021 7:39 am
TGGTI wrote: Thu Aug 26, 2021 3:29 am Ok it’s not until June next year. But some cars are on a 1 year waiting list…

Will be 3 yrs old in June 2022. Mileage will be approx only 7,500 by then

Currently paying on lease £271pm (3mth upfront fee was £813 that’s now history)

My questions are….

1) Do I buy it outright if possible?
2) Extend the lease if possible?
3) Lease a new car?

Would really appreciate advice. Thanks
Extend the lease or lease a new car unless they can guarantee a value that isn't stupidly inflated. Out of curiosity, why didn't you PCP the car? I have a GTI+ decently spec'd and I paid a 1k deposit and pay ~£290 a month. Selling now after a year and a half and i'm about 4k in positive equity, car is worth more than I bought it for and its done 14.6k miles.
Hi Stuart, I did look at PCP at the time (around April 2019) and the prices were top whack then (+£100pm vs leasing). Plus I had a previous lease car with an end date looming.

Never really looked into PCP, so you are able to sell within the PCP period? If correct, that does sound more interesting, especially with a rare car like this
TGGTI
New
Posts: 12
Joined: Thu Aug 26, 2021 2:01 am
Drives: GTI 2019
Location: Leeds

Re: GTI+ Lease ending - Buy or hand back?

Post by TGGTI »

SRGTD wrote: Thu Aug 26, 2021 7:46 am Difficult to predict what the state of the new car market will be like in 9-10 months time. However, if the current semiconductor shortage issue has improved and manufacturers are able to increase their car building capacity, then waiting / lead times should have reduced.

I’ve never leased a car before. However for me, option 1 would be heavily dependent on what the lease company would want to charge you to buy the car outright. If you like your car and the cost to buy is reasonable, then it’s worth considering. With option 2, I’ve read on other forums that lease companies sometimes increase the monthly payments if the lease is extended beyond the original term, so a big consideration for me would be how much any potential increased monthly payment would be compared to the current monthly payment.

With option 3, the state of the new car market at the time your current lease is coming to an end is a major factor, so it’s worth keeping up to date on developments so you’ll know whether the timing of leasing a new car of your choice to coincide with the end of your current lease looks feasible. If it isn’t, then buying an old(er) cheap, low depreciating car to tide you over for a few months until your new lease car arrives is worth considering as a forth option. If it’s old enough to be a low depreciator, you should be able to recoup most of the purchase cost when you sell it on.
Great comments SRGTD, thank you

Since posting I've learnt most leasing companies will maintain the current monthly or increase it as you've pointed out. Really disappointing as hoped the monthly might reduce! :roll:

For that reason, I think I'll look a lot more closely at PCP next time around rather than leasing. Also because my previous lease was returned in mint condition - and they stung me for around £300 for "defects" . Totally shocking but that's another story!

So I guess unless they offer me a really attractive price I'll be moving on. However, one big issue is they will not provide a quote until 3 months remaining on lease! (would need to wait until March in my case).

Think I'll start looking at a new order soon :idea:
Stuart_Rendall
Bronze Member
Posts: 185
Joined: Sun Sep 20, 2020 9:46 pm
Drives: Polo GTI+
Location: Derby

Re: GTI+ Lease ending - Buy or hand back?

Post by Stuart_Rendall »

TGGTI wrote: Sun Aug 29, 2021 6:16 pm Hi Stuart, I did look at PCP at the time (around April 2019) and the prices were top whack then (+£100pm vs leasing). Plus I had a previous lease car with an end date looming.

Never really looked into PCP, so you are able to sell within the PCP period? If correct, that does sound more interesting, especially with a rare car like this
Yes, I took out a PCP contract March 2020 with the terms being 20k miles per year, 1k deposit, and a 48 month term. I sold my car Friday to a local performance car dealer with positive equity. As long as you state the car has finance then the dealer will pay off the remaining finance and pay you the rest in positive equity or you will owe them money if you have negative equity. For me even if it is more expensive a PCP will always be what I go for, and then sell the car before the term is over, if I have positive equity. It is a no brainer.
monkeyhanger
Bling Bling Diamond Member
Posts: 2643
Joined: Fri Feb 23, 2018 9:58 pm
Drives: Audi A4 Avant Quattro 40 TDI, Polo GTI+
Location: Newcastle upon Tyne

Re: GTI+ Lease ending - Buy or hand back?

Post by monkeyhanger »

Stuart_Rendall wrote: Sun Aug 29, 2021 10:12 pm
TGGTI wrote: Sun Aug 29, 2021 6:16 pm Hi Stuart, I did look at PCP at the time (around April 2019) and the prices were top whack then (+£100pm vs leasing). Plus I had a previous lease car with an end date looming.

Never really looked into PCP, so you are able to sell within the PCP period? If correct, that does sound more interesting, especially with a rare car like this
Yes, I took out a PCP contract March 2020 with the terms being 20k miles per year, 1k deposit, and a 48 month term. I sold my car Friday to a local performance car dealer with positive equity. As long as you state the car has finance then the dealer will pay off the remaining finance and pay you the rest in positive equity or you will owe them money if you have negative equity. For me even if it is more expensive a PCP will always be what I go for, and then sell the car before the term is over, if I have positive equity. It is a no brainer.
You've been pretty lucky (as have I), due to the new car shortage bumping up used prices. 48 month PCP term with a small deposit down... you're be lucky to be in positive equity towards the end of year 3 under normal circumstances. I wouldn't count on being that fortunate again in the forseeable. Nearly new prices are 15% up on what they would normally be and what they will be again when new vehicle supply is back to normal.
TGGTI
New
Posts: 12
Joined: Thu Aug 26, 2021 2:01 am
Drives: GTI 2019
Location: Leeds

Re: GTI+ Lease ending - Buy or hand back?

Post by TGGTI »

Hi guys, an update since my original post from Aug last year!?!

I'm going to extend my Lease from June this year - I've had a quote from Arval and it's a no-brainer considering the car (and car-crash of the economy right now!) and £40 pm cheaper than I am paying

Remember this was never a PCP but a straight Lease.

Original Lease was :-

3yrs / 24,000 miles / 3mth upfront / £271 pm

Current Mileage only 6,000 after 2.5 years - That's what working from home does for 2 years!

Quote 1 - Extend to 3.5yrs / 17,500 miles / £231 pm
Quote 2 - Extend to 4yrs / 20,000 miles / £233 pm

No fees to extend and it's great they take into account the low mileage I've done (They have a minimum of 5,000 per year and applied that in their quotes back to day 1)

Both options allow me to extend again if I want to.... So to me 6 mths has to be the best option (strangely cheaper too....?)

The car drives as well / better than ever and is still mint condition inside / out. Only concern will require an MOT in June and out of warranty for as long as I extend the lease

Can't really see any drawbacks and to be honest I can't see any other car that really appeals to me as this one....

Please let me know if you think I'm missing something
SRGTD
Bling Bling Diamond Member
Posts: 3508
Joined: Sun Oct 11, 2015 9:40 pm
Drives: 2020 AW Polo GTI+, Pure White.
Location: UK

Re: GTI+ Lease ending - Buy or hand back?

Post by SRGTD »

@TGGTI; I think that with most new cars having very long lead times just now, it’s a sensible decision. Some of the media items I’ve read on semiconductor supply shortages to the motor industry suggest that the situation could continue into 2023.

I’d be very surprised if your car would fail the first MOT - I’ve had quite a few brand new cars in the last 40+ years and I usually keep them 4 - 5 years. They’ve all sailed through the first and second MOT’s without any issues. It’s always worth checking things like wiper blades and tyres before the MOT and if they’re a potential MOT fail, get them sorted before the MOT’s carried out. However, with your car having had so little use, it’s unlikely to fail on wiper blades or tyres. You can get a car MOT’d up to a month in advance of when it’s actually due - I always do this, and with the first MOT if there’s anything that might be a fail that would be covered under warranty, you can get it sorted at VW’s cost.

As for the car no longer being under warranty at three years old - if you’re risk averse, then you can always buy an extended warranty for peace of mind.
TGGTI
New
Posts: 12
Joined: Thu Aug 26, 2021 2:01 am
Drives: GTI 2019
Location: Leeds

Re: GTI+ Lease ending - Buy or hand back?

Post by TGGTI »

Great reply SRGT

Never needed an MOT with previous cars and was unaware can have 1 month before due / warranty runs out. Will be doing that for sure. Cheers

It had a a full service this month and the comments were 'as new' (from the usual technician video...) - Tires all good, brakes etc and more than sufficient for June MOT I'm sure

I'm intending to at the same time as MOT that they do a proper check of diagnostics prior to warranty ending. How thorough they'll be is another question
TGGTI
New
Posts: 12
Joined: Thu Aug 26, 2021 2:01 am
Drives: GTI 2019
Location: Leeds

Re: GTI+ Lease ending - Buy or hand back?

Post by TGGTI »

PS. Regarding extended warranty, I think I'll take the risk on such low mileage. Also the monthly reduction (£40) will go a long way as some 'insurance'.

I'd considered a new car replacement, looked at a couple of different models. But the initial outlay and monthly premiums are scary in uncertain times. Especially when this 2019 GTI is still a fabulous car, with the facelift not offering any major differences visually or significant driving improvement
Post Reply