Long term car rental/leasing v buying 2nd hand car

The first thing to think about is what you would do in the UK - do you usually lease or buy second-hand? Or are your requirements different now - no commuting, etc.?  I assume you are, or will be a permanent resident, as opposed to looking for a car to use when at a holiday home?

The banks (as you've said) and most of the major car manufacturers offer leasing (the banks call it 'renting'), for similar costs as the UK.

The pros & cons are similar to the UK - you have the benefits of a new car, protected by warranty, fully maintained - and most plans also include fully comprehensive insurance; however, you pay an appropriate monthly rate, as you're covering all those costs, plus the depreciation from new of the vehicle. So, if you're leasing a new car, which would sell for £25k for example, then a considerable part of your lease needs to cover the depreciation down to 50% of it's value after 3 years. You also need to carefully forecast your mileage (or, I guess 'kilometreage' in Spain?) as most leases are based on 15k km per annum, with hefty charges for exceeding that over the term - and the advertised lease rates increase proportionately for higher annual mileage.

The main difference to the UK is that the second-hand / used / pre-owned market is not as mature as the UK, mostly because the provision of company cars to employees is much lower, so there are less fleet cars subsequently available for sale as 'used'. However, you should find a decent number of ex-hire cars for sale, but these tend to be high mileage, smaller cars with lots of scuffs & scrapes (although they are often mechanically well-maintained).

If undecided (I don't know if you're about to move to Spain, or have recently moved?), then car rental from most traditional car hire companies can be very cheap while you explore options - as low as 2 euros per day - but varies massively depending on the season. Normally, you can only rent for a maximum of 30 days at a time, but you can arrange that consecutively (albeit you have to bring the car back to be checked / exchanged every 30 days).

Finally, worldwide car sales are massively down due to COVID19, so there will be lots of bargains around, once we're allowed out again, as dealers & manufacturers will be desperately trying to move aging stock and get some income...

Hope this helps!

Hi RichT

Thank you so much for your informative response.
I agree I would expect that the costs of new/used cars and rates of short/ long term rental should drop once we get out of lockdown 🤞🏻.

Our position is we now live in Spain permanently  and only require a car for leisure activities. I had previously leased a car when in UK but unsure if better system here - which it appears to be as is pretty much a fully inclusive package. 
We had been hiring cars here until a month or so ago when last one was due back to Airport. We found the rates greatly increased after a 21 day period so trekked up and down to Alicante each time. This system at that time of year was extremely cheap but like you say will rise greatly in busier times.

We can’t do anything until we’re allowed out and companies able to trade again but all information in preparation is very welcome. 

Thanks again 

Hola    I do wish I rented a car     even car holiday lets can work out fair    over time     then there is a brand new car   a very small  C1  is €10,000    free road tax etc 

but whatever you do is go very careful  buying a used car     I bought from  Specialist Vehicles in San Javier      two weeks later the engine blew up     they would not even respond to the calls      I had to hire someone to negotiate   he got nowhere!!!

it takes over two years to bring a case to court in Spaiñ     and again a lot of money            

Hi,

I was looking at leasing (yes, they call it renting in Spain) just before the lockdown.

I have leased a lot of cars in the UK. In fact my current car, which is on UK plates is leased, and given I now live in Spain and that it’s due back soon need to sort another car ASAP.

Firstly, banks are cheaper than dealerships for leasing, also unless you can show a sufficient income / pension paid directly into a Spanish bank the dealerships won’t allow you to lease. And given pensions can’t be legally paid directly into Spanish banks I didn’t have much choice.

As for the economics, we’ll that’s down to you? As previously stated, second hand cars are very expensive compared to the UK, due to the lack of company cars and no real culture of leasing, so the second hand market isn’t saturated like back home, so prices are high. It’s supply and demand.

The Spanish tend to keep their cars until they die (the car that is), so you can be buying someone else is problems, unless it’s pretty new and low mileage. In which case you might as well buy new as the price differential isn’t that great.

A lot of people who have never leased don’t get it as they see it as dead money, like renting a house, but cars never appreciate unlike houses, just depreciate. Also the Spanish system is generally better than the UK as it’s all inclusive. Not only do you get a new car every 3-years but also Tax, servicing, insurance, and can also include fuel is you want. All the headaches are taken away. Obviously it comes at a price.
For me the major benefit was I’m not taking a capital hit on my pension for which I’d be taxed and lose any interest accrued. It’s drip fed out not all in one hit.

Due to the lockdown I wasn’t able to pursue further, but was told by the bank that you need to get a type of quote from the dealership (sorry can’t remember what it was called) and then take it to the bank and they will lease it for you.

Hope this helps?

Thank you for your advice - it’s duly noted. Cheers

Hi Nick B

Thanks so much for your detailed input - I really appreciate it as it confirms many of my own thoughts. Also good tips in there.  I didnt realise we had to go to a dealer first then go to bank. Do you get the full rental information from them or just the car make/model & cost etc do you know? We’re not set on any particular car make/model as yet so plenty more homework for us to do during lockdown then 😩. Thanks again 

Yes, that’s the problem I’ve got, I’m not sure what I want, so are still researching. I was back in the UK just before the Lockdown, so went around all the dealerships there which helped work out what I didn’t want. Unfortunately, not all the models are available in Spain are the same. Kia were the main difference as you couldn’t just order a model, as they are imported each month and not made to order, so you can just see what deals are available that month based on what had been delivered into Spain.

Generally, the prices are comparable with those in the UK, again with the exception of Kia which seemed far more expensive.

If you talk to your bank they’ll tell you how it works. Mine said I needed to decide what I wanted then go to that dealer and get this type of quote (it had a specific name which I can’t remember), but if you ask at your Spanish bank they’ll tell you. It was Just like a quote for leasing the car over the timescale and the all inclusive services you decide on. The bank then give you their price and if you’re happy with it they will organise and order. Bear in mind there is usually a Minimum of a 2 month lead time.

Cheers Nick

2 month lead time seems long but hey ho it is what it is I suppose.
Once we can hire a short term rental car again (and again and again 😩) we’ll get to our bank & dealerships to get the ball rolling. 
Good luck with your mission too. 
Many thanks again 

Don’t forget your talking about getting a new car that is manufactured to specification/order and then imported, so 2 months is the minimum and actually quite quick. I waited nearly 12 months for my Jag F-Pace to be made and delivered in the UK.
If this is an issue it might be worth looking at Kia, as they just import and you buy from what they’ve got in that month, so no lead time other than the paperwork.