The economics of new car sales
Discussion
r11co said:
This, over and over! There'll be those who have signed up to leases and are burying the 'renter's remorse', or willfully spunk the extra cash away because they are comfortable with waste or simply don't understand the principle of equity.
They will defend their decision in here until they are blue in the face (always a case of 'they doth protest too much') but the figures speak for themselves.
Whats the remorse in buying a car and having no excess bills for three years? Suits a lot of people. You can now get a new car for as little as £69 a month. They will defend their decision in here until they are blue in the face (always a case of 'they doth protest too much') but the figures speak for themselves.
I dont come at it from the "i lease / PCP a new car therefore i must be right", i come from it from the viewpoint of looking at ALL the options when its time to change your car and see whats right for YOU at that time.
My last car i bought for cash (not much of a hardship as it was a cheapie), current car is on a PCP deal because it suited me best. I'd say 50% of the cars i've owned have been cash purchases, 30% finance and 20% PCP. If things go the way i expect them to next year, my next car wont need to be diesel that does high miles, so i'll probably buy something cheaper outright.
In terms of equity - yes, you could want to store equity in a car, but its not that great in that its typically going down in value. In fact if you buy a car with cash then its not equity at all - its just your savings in a depreciating asset.
My beef with some of the posters on here is the "if you cant buy it for cash you cant afford it" or "how do these people afford payments" or "only fools lease", which quite honestly are banal, hence why i tend to challenge them.
thelawnet said:
'000s Maker
184 Volkswagen
2 Subaru
And where the most popular car in 2004 was the Focus, it's now the Fiesta.
Selective quoting because I want to highlight a couple of these points...184 Volkswagen
2 Subaru
And where the most popular car in 2004 was the Focus, it's now the Fiesta.
- In the US Subaru have sold more cars than VW for the last two years!!!
- I'm looking at the sizes of these two cars and whilst they've grown over the last 10 years the Fiesta still isn't the size of an original Focus. Is it the most popular car now because of price points or this now the optimal size car because of economy concerns, parking restrictions or just becuase it hits the sweet spot all round?
swisstoni said:
What happens if the work dries up? Does the lease car go back?
Why would it? Its no more likely to than someone having to sell their car if they've ALL their savings put into a car.ie, you're in a pretty dire state no matter which camp you're in if you've no money at all to cover ANY outgoings before you get another job.
And which is better in terms of a sudden job loss? £5,000 in a car that you have to sell OR £5,000 in savings and a couple of hundred in a monthly payment until you get a new job?
I guess though if someone doesntt have the confidence in their own skillset that they could get another job in say three months, then probably best to buy something cheap for cash.
xRIEx said:
Again, impossible to say across the board - 20% is a made up figure. There are too many variables: which manufacturer? Which model? How old is the model line? What is the manufacturer's business model? We all know the fluctuations in the Golf R deals recently, they've been dirt cheap, now they're more expensive, showroom prices haven't changed one bit - is anyone saying that "20% more expensive" has consistently been accurate throughout these varying discounts? Bulls
t. It's a figure made up to support one side of an Internet argument.
As a maths nerd, I'd love to see how the representative figures are calculated if anyone can provide?
+1t. It's a figure made up to support one side of an Internet argument.As a maths nerd, I'd love to see how the representative figures are calculated if anyone can provide?
Nail on head.
TurboHatchback said:
If things are fairly tight then why on earth would you be buying/leasing a new car? I can't understand how everyone seems to afford it, I'm a single bloke on an engineers salary with no debts, no dependents and renting just a room but I couldn't bring myself to spunk that kind of money, how on earth does everyone with families and mortgages etc afford to do it? They can't all be minted given the national average salary is about £26k.
Long may they continue obviously so there is a good supply of cheap used cars for me to pick from
.
The clue is in the I'm an Engineer" bit.Long may they continue obviously so there is a good supply of cheap used cars for me to pick from
.There's no one tighter than a Yorkshire Engineer - I should know.
xRIEx said:
Again, impossible to say across the board - 20% is a made up figure. There are too many variables: which manufacturer? Which model? How old is the model line? What is the manufacturer's business model? We all know the fluctuations in the Golf R deals recently, they've been dirt cheap, now they're more expensive, showroom prices haven't changed one bit - is anyone saying that "20% more expensive" has consistently been accurate throughout these varying discounts? Bullst. It's a figure made up to support one side of an Internet argument.
As a maths nerd, I'd love to see how the representative figures are calculated if anyone can provide?
20% is a conservative figure based on a decent sample of checks I make every time I compare lease to cash. It is not scientific, just a rule of thumb that corresponds to my observations (what you elegantly call bullst. It's a figure made up to support one side of an Internet argument.As a maths nerd, I'd love to see how the representative figures are calculated if anyone can provide?
t) which are impartial (I would lease if it was cheaper on the cars that I choose), it's a far better indicator than say 50% depreciation over 3 years. Not just because I haven't never lost more than 30% over 3 years. It's really simple : compare the lease total cost to the likely depreciation over 3 years (providing it's based on transaction prices NOT list) : 20% difference is typical. But the leasers don't buy so they don't know what the transaction prices are both buying and selling so they can't actually compare. To go back to that 50% rule on second hand car : how can it be when if you buy wisely you don't even suffer that on a new car ? I have asked many times and still haven't had a response.nickfrog said:
20% is a conservative figure based on a decent sample of checks I make every time I compare lease to cash. It is not scientific, just a rule of thumb that corresponds to my observations (what you elegantly call bullst) which are impartial (I would lease if it was cheaper on the cars that I choose), it's a far better indicator than say 50% depreciation over 3 years. Not just because I haven't never lost more than 30% over 3 years. It's really simple : compare the lease total cost to the likely depreciation over 3 years (providing it's based on transaction prices NOT list) : 20% difference is typical. But the leasers don't buy so they don't know what the transaction prices are both buying and selling so they can't actually compare. To go back to that 50% rule on second hand car : how can it be when if you buy wisely you don't even suffer that on a new car ? I have asked many times and still haven't had a response.
I would respectfully say your observations ARENT impartial.t) which are impartial (I would lease if it was cheaper on the cars that I choose), it's a far better indicator than say 50% depreciation over 3 years. Not just because I haven't never lost more than 30% over 3 years. It's really simple : compare the lease total cost to the likely depreciation over 3 years (providing it's based on transaction prices NOT list) : 20% difference is typical. But the leasers don't buy so they don't know what the transaction prices are both buying and selling so they can't actually compare. To go back to that 50% rule on second hand car : how can it be when if you buy wisely you don't even suffer that on a new car ? I have asked many times and still haven't had a response.Apart from anything, you're looking at a specific car, then say you are comparing the lease deals.
That is NOT the most cost effective way to get a lease. The best lease deals are best found on a broad TYPE of car you want. For example, a Ford KUGA best lease deal might be £350 a month, which "might" make it more expensive relative to depreciation, however a Qashqai might be £275 a month, which might make it cheaper than depreciation.
Also, lease deals are best taken on the "standard" car. If you try to lease a 335i M Sport with 19s, NAV, extended leather, comfort seats, upgraded sound, Individual paint then the lease will be silly money. Go for a 335i in standard spec and it will be much more competitive.
berlintaxi said:
daemon said:
I guess though if someone doesntt have the confidence in their own skillset that they could get another job in say three months, then probably best to buy something cheap for cash.
Could you try and be a bit more patronizing in your future posts.The sort of person who thinks "oh if they loose their job their car will have to repossessed" is being patronising in their own way arent they because they're assuming other people are stupid enough not to have any savings?
And lets be honest, theres no real shortage of jobs out there for people who are prepared to get off their arse and do them.
Edited by daemon on Friday 21st November 14:18
I've found buying outright cheaper based on the cars I have , after three years my Fabia will have lost getting on for 50% of the purchase cost , I have had to pay nothing in repairs or maintenance which works out to about £211pm . I'm sure I could have got something as good for that amount per month but by the time you add initial payments, arrangement fees and deposits I'm not so sure.
Plus I don't need to find £7600 to buy the car and have the deposit should I choose to change
Plus I don't need to find £7600 to buy the car and have the deposit should I choose to change
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