PCH looks like a much cheaper deal than if you were to buy a car on it's own (like in a PCP deal)  However when you go to hand the car back at the end of a PCH term, what typically happens to the car?  I take it that you don't have much of a choice to buy it but it must go somewhere (so could you buy it?)

As far as I am aware no Lease companies offer a buyout clause. This may be a legal limitation to prevent new car VAT dodging scemes which could otherwise be setup for private owners.

From my understanding, it is actually illegal for the hirer to ever buy a car that they've operated under a PCH arrangement.

I am not sure to be honest.

I think some lease companies might entertain the idea of selling the car to you for "reasonable market value" if they think they can turn a bit more profit on the car and save them the time and expense of having to arrange for it to go to auction (as most ex lease cars do).

I know with my last company car I was semi-interested in buying it....in the main because I was practically its only keeper (a female colleague had it for about 4 months/4k miles before me) and just before it went it had recently been serviced, had new rear brakes, AC compressor and receiver dryer and 4 new Michelin Pilot Sport 3 tyres....and other than one badly kerbed wheel (thanks to a moron dealer driver who kerbed it severely upon returning it from its last service) it was in good shape.

Two things stood in the way....

I think they would have wanted too much money for it

Worse still they'd actually sold it on before the lease had expired (illegal methinks) so the option was not there and had to return it early as a consequence as I could not get it taxed as the lease company technically no longer owned it.

They normally go straight to auction.

The VWFS website mentions that, in certain circumstances, someone other than the hirer may be able to buy if they register their interest in advance... there's a form where they have to state the reg no, etc., so it world have to be someone who knew the hirer. I guess a friend could then sell it on to you, but I don't think they'd be offered a particularly good price in the first place.

Beyond that, they all go off to auction

Edited 24 April, 201511 yr by mr1

In Estonia if you want to lease a car you get charged like this. Car price (not including VAT) minus residual value,  gets dumped down into monthly payments plus interest value, then VAT is added on top of that. So in this case if I want to buy out the car ahead of time I can do that buy paying current value today + VAT and the car is mine (current value is car price not including VAT minus all the payments I have done so far not including interest and VAT).

 

If the contract ends in normal conditions with just residual value I have the first right to buy it by paying that value + VAT no questions asked. If not then the car goes back where it came from and I do not see it any more.

 

Usual practices are something like this. Car price minus VAT, one time payment of 10-15% plus VAT with residual value of 30% in terms of 125 000 km over 5 years. If you drive more then you have to pay extra per km, which was pretty ridiculous amount.

 

In these cases you can't really avoid VAT since you pay it all the way as individual payments are piling up or if you just want to buy it out right - VAT is added anyway...

I have bought my ex company cars directly from the lease company in the past. It used to be a good deal because they would otherwise send the car to the auctions so you are are saving them the auctioneers fees!

I assume it is still the case now. You can ring the lease company up and ask them for a buy back value.

I enquired about buying my previous company car which was a MkII Superb leased directly from VWFS. They quoted me £8,800 to buy it but I got cold feet and opted to buy the O3 instead as the S2 had 88k on the clock. Part of me wishes I'd gone for the S2 now, ok it would have 135k on the clock by now but I would have paid it off this month, whereas I still owe £13k on the O3 and it's currently worth about £11k. Anyway, if I keep it for 4 years I'll have bought it outright and any residual value will be a bonus compared to running a company car as I'm only paying the same on the O3 as the S2 cost me in allowance and tax!

Cheers for the advice. Went pcp in the end as I intend to keep the car after the term and this offered the most certainty that I would be able to do so.