Case study: Why Kathryn Barwick was better off leasing
When Kathryn Barwick had to take out an additional loan to clear the final balloon payment on her car, she realised she would be better off leasing.
Having financed her previous car, a Nissan Qashqai, with a personal contract purchase (PCP) agreement via her local dealership, when she came towards the end of the contract she realised she didn’t want to keep the car.
Determined to find a solution that suited her best, Mrs Barwick and her husband Jay from Prestbury began to look around online at their options.
Mrs Barwick said: “I like to change my car every few years, so when it came to upgrading the Qashqai, we started to look at how much it would cost to settle the finance and buy the car outright.
“We had already paid out £8,000-9,000 on our Qashqai PCP deal over two and a half years and we initially still looked at new PCP deals. But we’d lost so much money on the Qashqai it didn’t make any sense to walk away from the car and then do the same thing over again.
If you’re going to change your car often, like we do, it makes the most sense to lease. Our current car will only cost us £6,000 over two years, significantly less than our previous PCP deal.
“It was then that it became obvious we didn’t really own the car and had essentially leased it - for a much higher cost. We eventually took a loan out to pay off the balloon payment before then selling the car onto a friend just to have it off our hands.”
She added: “My mindset when taking out the PCP deal was ‘we’ve bought this car’ but of course you never actually own a car on PCP until you make that balloon payment.”
Mrs Barwick found a lease deal on a Volkswagen Tiguan SE Nav 2.0 TDI, advertised via Leasing.com. The two-year deal meant for a fixed monthly cost she could lease a brand-new car at a much lower monthly cost and hand it back at the end without any hassle.
She said: “If you’re going to change your car often as we do, it makes the most sense to lease. Our current car will only cost us £6,000 over two years, significantly less than our previous PCP deal.”
Mrs Barwick also found searching for the best offer online meant she could confidently compare prices and chose the right deal for her: “When searching for a lease deal online, you’re in charge. You pick the car. You choose the deal. We found a 24-month contract, with nine months up front, and 8,000 annual mileage allowance was the ideal rental profile for us.”
“Once we’d found the model and spec we liked it was such an easy process. We phoned up the dealer and they said it was in stock in the colour we liked. They emailed over the documents, we signed them and sent them back. Then it was just a case of going to the dealership and all it took was two signatures and it was done. It was amazing.”
Since taking out their lease on the Volkswagen Tiguan, Mr and Mrs Barwick have been quick to start recommending leasing to friends and family: “Everybody we’ve talked to about our Tiguan wants to know how much we’re paying, how much we paid up front.
“When we tell them the price their response is usually disbelief at how it works out.”