Should I buy my ex lease car?

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?

Unfortunately it will probably not be at a bargain price. The prospective purchaser will probably think that it is an ideal opportunity for the finance company to get rid of the vehicle without any hassle, the finance company will probably think that it is an ideal opportunity to get a higher price for the vehicle, setting the value at somewhere in between the trade and retail price.

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.

It would be nice to buy your car at a lower price than it was offered to you by the finance company and if you were sure it was going to be sold at auction and you knew which one, you probably could.

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.

Private buyers do buy at auctions but auctions are really best suited and geared to trade buyers, sometimes private buyers miss vital warning signs on a car that trade buyers will pick up on. Some ex contract hire cars are sold with “no major defects” which means that if it is found to have a major defect, the vehicle can be rejected but only either on, or shortly after the day of sale. Others are sold on a “bought as seen” basis. However this cannot be interpreted that there is something wrong with the car, it is just some company’s policy to sell all their vehicles in this way.

One of the pitfalls for private buyers at auctions is that they get carried away and have a tendency to bid far too much for vehicles, knowing when to stop is vital. Trade buyers know roughly what they can sell a car for and what it is going to cost them to clean it up and put a warranty on the vehicle, so significantly overpaying for a car is not an option; particularly when you take into account that as soon as the next month Glasses Guide comes out the car will almost certainly have dropped in value.

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.

It is worth checking the service history of the car, to make sure that it has been serviced at the correct intervals. You would normally expect the leasing company to check this on the vehicles return but they do sometimes overlook it and failure to service the vehicle at the correct intervals, will generally invalidate the manufacturers’ warranty. One of the problems of buying a vehicle without a warranty or where the warranty has expired is the risk of an electronic fault, which nowadays is very common and often very difficult to cure. All in all buying your own car when it comes to the end of its term is a much better bet.

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