Property News · September 5, 2014

Buy-to-let cars – with 11% average return promised


It’s 10 times what you’ll get on the many savings accounts – but are the returns from leasing out a car too good to be true?The genial voice on radio adverts airing on Classic FM and LBC promises listeners an extraordinary investment return. “It’s a simple idea; buy a car and they just lease it out from you … I get an average return of 11% a year and the assets give me security and peace of mind.” But with returns that are 10 times the sums paid on many deposit accounts, listeners are asking: is this too good to be true?The company is called Buy2LetCars and it asks investors to hand over a minimum of £13,500, which it says is enough to buy a new car. That car is then leased out and the investor receives £250 a month from the lease payments for the next three years, adding up to £9,000. At that point, with the lease expiring, the investor is sent an £8,955 lump sum. It is these figures that allow Buy2LetCars to claim that the return to investors is 33% over three years, or 11% a year (although 11% a year compounded over three years is actually 36.7%). Continue reading…

Source : theguardian.com
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