Cars

Vans

Personal Car Leasing - Case Study #2

A second family vehicle required by a nurse

Audi A3 Sportback

Name:

Elizabeth Ellis

Location:

Leeds

Occupation:

Nurse

Vehicle:

Audi A3 Sportback 1.9 Tdie Sport 5 Door

Personal Background

Mrs Ellis is a busy working mum with two school age children. Her husband drives a company car and she needed a reliable, practical car that she could use primarily for her daily commute to her job as a nurse in a busy hospital. The car would also be used for weekend shopping trips and ferrying the children and their musical instruments to and from school and various clubs and after school activities.

Mrs Ellis has owned a string of unreliable older vehicles that have often let her down. She has wanted to drive a new car for some time but always thought that they were too expensive. She had long been an admirer of the Audi A3 as a colleague at the hospital where she works drives one.

Cost Comparison

Mrs Ellis was very keen to ensure that her new car was far more reliable than those she had been driving. Her options were to go for either a brand new car purchased with the help of a bank loan, a good quality second hand car purchased with the help of a bank loan or a personal car leasing contract on a brand new Audi.

New Audi - Example Figures

The typical costs involved in acquiring a new Audi A3 1.9 TDi Sport 5 door Sportback would be:

Total Cost of Vehicle:

£16995.00

Initial Down Payment:

£1995

Bank Loan:

£15000.00 (secured homeowner loan over 5 years at 7.5%)

Monthly Repayments:

£300.56 x 60 months

Total Repayments:

£18033.6

Second Hand Audi - Example Figures

The typical costs involved in acquiring a second hand Audi A3 1.9 TDi Sport 5 door Sportback would be:

Total Cost of Vehicle:

£9495.00

Initial Down Payment:

£1495

Bank Loan:

£8000.00

Monthly Repayments:

£256.52 x 36 months

Total Repayments:

£9234.72

Additional Costs:

Warranty:

2 years at £495

AA membership:

3 years at £174

MOT:

2nd and 3rd year of ownership at £76

Road Tax:

2nd and 3rd year of ownership at £125.00 per year

Approx. Total Cost New Audi:

£21942.60

Approx. Total Cost second hand Audi:

£12643.72

Current Car Approx. Part Exchange Value:

£3000.00

Note: These figures are approximate guidance figures only. The approximate total costs exclude any anticipated maintenance costs and the total cost for the brand new Audi include only 3 years of additional costs.

Audi A3 Sportback - Personal Car Lease Costs

The costs involved in acquiring a brand new Audi A3 1.9 Tdie Sport 5 door Sportbacka from Nationwide Vehicle Contracts on personal car lease contract were:

Initial Down Payment:

£919.94

Monthly Payments:

£229.94 x 35 months

Additional Costs:

Warranty:

Nil Cost. Elizabeth Ellis's new leased Audi includes 3 year warranty from Audi UK.

AA membership:

Nil Cost. Elizabeth's new Audi comes with a full 3 years breakdown cover.

MOT:

Nil Cost. Her new Audi will not need an MOT during the 3 year duration of the lease.

Road Tax:

Nil Cost. The leased Audi A3 Sportback comes with a full 3 years road tax included in the lease price.

Total Costs excluding Maintenance:

£8967.84

Benefits of Personal Car Leasing for This Customer

The benefits of personal car leasing for this customer were:

1. Compared with a brand new Audi A3 Sportback purchased with a bank loan she would see a cost saving of about £9975.
2. Compared with a second hand Audi purchased with a bank loan she would see a cost saving of about £676.
3. Mrs Ellis is now driving a brand new, reliable Audi A3 with full manufacturers warranty which she thought would always be out of her reach.
4. Her monthly car lease payments are lower than the monthly repayments would have been on bank loans for either a new or second hand Audi.
5. She is no longer worried about the reliability of her car.
6. She doesn’t need to concern herself with maintenance worries as these are covered in her lease contract.
7. The monthly payments for this new car are affordable and fixed. There will be no sudden surprise repair costs.
8. The initial down payment was minimal and quite affordable.
9. She doesn’t have to beg her husband for the loan of his reliable company car at weekends to do the shopping.

Prices correct as of 31st March 2009

Agent's Notes

The approximate cost savings, detailed above, take into account an estimated part exchange value of £3000 for Mrs Ellis's current car. This was a very generous estimate.

Crucially for Mrs Ellis, the monthly car lease payments for her brand new Audi A3 Sportback were very affordable and significantly less than the monthly payments would have been for either a brand new or good second hand Audi purchased with a bank loan. Mrs Ellis is now very happily driving her brand new car with no additional costs and no break down worries.