New Cars - is Leasing going to become the new norm?
Discussion
drainbrain said:
You seriously believe that the vast majority can't use £100k to make £10k over 10 years?
You're not talking about using 100k to make 10k over 10 years, you're talking about using an average of about 30k (the average difference in equity of the two mortgages) to make 10k over 10 years. Assuming the profit on an investment is taxable, you'd need to be investing at close to 5% to achieve that. Ultimately it just comes down to whether you can invest at a greater (post-tax) interest rate than you pay on the mortgage. It really is that simple.
Edited by kambites on Monday 29th June 19:45
EGTE_RPF said:
You do have to hand it back in good condition, though, right?
So you can't be too relaxed, sadly.
Minor dings, scratches and light alloy curbing are OK. Anything more and you're better of repairing before the hand-over. A pre-handover inspection will highlight any repairs and potential costs. It's all clearly defined. I found the process very fair and transparent. So you can't be too relaxed, sadly.
In many cases and depending on an individuals own situation, leasing can be significantly more cost effective than purchasing, either outright or on a PCP type plan.
There is a huge amount of financial ignorance displayed by many, usually those with the simplistic attitude that leasing is just financing and that people only do that because they cannot save/want to keep up with the Jones' or live hand-to-mouth.
The same sort of people just spout the usual "but you won't ever own it" or "you don't get anything after 2 years of payments", completely failing to take into account depreciation or simply not understanding that depreciation is a real cost.
Leasing suits my situation perfectly. I want a daily driver to get me from A to B. It needs to be reliable, should be reasonably painless to run and have a few nice features. I don't want to own the car and I would like to change it every 2/3 years.
Leasing isn't for everyone.
There is a huge amount of financial ignorance displayed by many, usually those with the simplistic attitude that leasing is just financing and that people only do that because they cannot save/want to keep up with the Jones' or live hand-to-mouth.
The same sort of people just spout the usual "but you won't ever own it" or "you don't get anything after 2 years of payments", completely failing to take into account depreciation or simply not understanding that depreciation is a real cost.
Leasing suits my situation perfectly. I want a daily driver to get me from A to B. It needs to be reliable, should be reasonably painless to run and have a few nice features. I don't want to own the car and I would like to change it every 2/3 years.
Leasing isn't for everyone.
RYH64E said:
The example I quoted for an E Class (E350, Premium Plus) was the deal widely discussed on here 9 months or so ago, 6+23 £287+VAT per month, or 29*287*1.2= £9987.60 total including VAT.
but that is £416 a month! So what sounds reasonable is actually a lot (IMO) Is that really the best thing to do for most people? They could buy a decent car for 10 grand, sell it in 5 years for say 2 grand. Perhaps spend 2 grand in running costs which means its cost them 10 grand for 60 months = £166 quid a month, leaving them £250 a month to put into their pension.Far to sensible for the thousands of people who will bemoan their woeful state pension when they're older.
(I haven't understood your post - do you get the car for 24 months ie 2 years or 29 months?
if 29 months obviously figures change to 344 month cost which is still 180 quid a month that could go towards pension)Edited by CoolHands on Monday 29th June 20:21
CoolHands said:
but that is £416 a month! So what sounds reasonable is actually a lot (IMO) Is that really the best thing to do for most people? They could buy a decent car for 10 grand, sell it in 5 years for say 2 grand. Perhaps spend 2 grand in running costs which means its cost them 10 grand for 60 months = £166 quid a month, leaving them £250 a month to put into their pension.
Far to sensible for the thousands of people who will bemoan their woeful state pension when they're older.
Never mind the monthly cost, it's the total amount that's important, and in that respect it's been clearly stated.Far to sensible for the thousands of people who will bemoan their woeful state pension when they're older.
Yes, we all know running a £10k second-hand car is cheaper than leasing a £40k car.
And why this notion that people who lease are lacking in pension provision?
CoolHands said:
RYH64E said:
The example I quoted for an E Class (E350, Premium Plus) was the deal widely discussed on here 9 months or so ago, 6+23 £287+VAT per month, or 29*287*1.2= £9987.60 total including VAT.
but that is £416 a month! So what sounds reasonable is actually a lot (IMO) Is that really the best thing to do for most people? They could buy a decent car for 10 grand, sell it in 5 years for say 2 grand. Perhaps spend 2 grand in running costs which means its cost them 10 grand for 60 months = £166 quid a month, leaving them £250 a month to put into their pension.Far to sensible for the thousands of people who will bemoan their woeful state pension when they're older.
(I haven't understood your post - do you get the car for 24 months ie 2 years or 29 months?
if 29 months obviously figures change to 344 month cost which is still 180 quid a month that could go towards pension)Edited by CoolHands on Monday 29th June 20:21
CoolHands said:
RYH64E said:
The example I quoted for an E Class (E350, Premium Plus) was the deal widely discussed on here 9 months or so ago, 6+23 £287+VAT per month, or 29*287*1.2= £9987.60 total including VAT.
but that is £416 a month! So what sounds reasonable is actually a lot (IMO) Is that really the best thing to do for most people? They could buy a decent car for 10 grand, sell it in 5 years for say 2 grand. Perhaps spend 2 grand in running costs which means its cost them 10 grand for 60 months = £166 quid a month, leaving them £250 a month to put into their pension.Far to sensible for the thousands of people who will bemoan their woeful state pension when they're older.
(I haven't understood your post - do you get the car for 24 months ie 2 years or 29 months?
if 29 months obviously figures change to 344 month cost which is still 180 quid a month that could go towards pension)Sadly I think the "live now" approach will come to bite many people in the bum when they find they have 20 more years to live on b*gger all money. My neighbour is an estate agent and he has clients that re-mortgage annually, based on rising house values, to pay school fees and upgrade the OH's car believing that what capital is left will keep them at a decent standard of living from 65 t0 90.
Edited by CoolHands on Monday 29th June 20:21
yeah I realise that you do actually get something for your money - you get to drive a nice new motor with all mod-cons.
But I'm just trying to show that even with a pretty reasonable car at 10 grand it makes a huge difference to what else you could do with your money, which on the headline adverts of £287 + vat may be sidelined.
But I'm just trying to show that even with a pretty reasonable car at 10 grand it makes a huge difference to what else you could do with your money, which on the headline adverts of £287 + vat may be sidelined.
It's fair comment that if people would face a more comfortable retirement if they put their money into their pension instead of blowing it running expensive cars (leased, purchased or whatever) - but the same goes for nice holidays, smartphones, gadgets, booze, fags, cinema tickets, eating out and every other luxury you can think of. You could eat from Aldi, wear George, holiday in a tent and travel by moped, but people have to strike their own balance and meet their own priorities.
swerni said:
Granfondo said:
swerni said:
Bet you're a bundle of laughs at a party
10k on a car?
f
k off!!!
£50 bicycle and I keep fit and pay even more into my pension.
Some or all of that may be bks, not unlike your conclusion 
Surely you didn't pay more than £10k for the clockwork orange! 10k on a car?
f
k off!!!£50 bicycle and I keep fit and pay even more into my pension.
Some or all of that may be b
ks, not unlike your conclusion hy sometimes 
£50 Is one tub on my TT bike!
Look at the other end of the market and the sums work the other way round; I went by the local Fiat dealer on the way home and they had a new Panda at the front, £99 down and £99 per month (didn't say what the period was though) A decent secondhand Panda will only cost about £4k less than a new one so no great saving to be had there (in Mercedes terms so leasing/PCP looks a no-brainer.
On the other hand a decent secondhand E class can be had for £15k, a saving of £25k on new, and that has to be covered by the original owner or leasing company one way or another.
So perhaps leasing will be become the norm for cheaper cars rather than expensive ones, or am I making the mistake of believing that folk think logically
so leasing/PCP looks a no-brainer.On the other hand a decent secondhand E class can be had for £15k, a saving of £25k on new, and that has to be covered by the original owner or leasing company one way or another.
So perhaps leasing will be become the norm for cheaper cars rather than expensive ones, or am I making the mistake of believing that folk think logically
r11co said:
daemon said:
nicanary said:
What happens when you retire and you're on a much lower income? Where does the cash come from to buy the retirement car?
From all the money you saving on not suffering massive depreciation on new cars?nicanary said:
I don't want anyone to think I'm knocking lease deals - they suit some people. I do 25/30k a year, so it's out of the question for me. But society has changed - nobody saves any more, and few people have adequate pension provisions. Personal debt is higher than ever, and nobody seems to worry about it.
If a 40-year old person leases a car at £300 pm, they will also have to save £100pm for 20 years, so when they retire at 60 they have £24k to buy a car, probably the equivalent of a base model Ford Focus. Unless of course they have such a large income on retirement that they can continue to lease.
If you rent a house, and have limited income, the Gov pays you housing benefit. They won't pay for your car.
Its this sort of mentality i dont get?If a 40-year old person leases a car at £300 pm, they will also have to save £100pm for 20 years, so when they retire at 60 they have £24k to buy a car, probably the equivalent of a base model Ford Focus. Unless of course they have such a large income on retirement that they can continue to lease.
If you rent a house, and have limited income, the Gov pays you housing benefit. They won't pay for your car.
What are you suggesting is otherwise done? Haemmorage £30K into a new car every three years and watch it turn into £15K then rinse and repeat just so you have enough equity to buy a new car when you retire or are you suggesting buying a used car, because oh look, Mr Retired Leaser can then do that anyway?
daemon said:
btcc123 said:
In todays society everyone wants new and wants it now so not all but most people that lease a car because they have not got the money to buy new so lease a car as they can afford it as they have a good monthly income and at the end of the day leasing a car for £250 a month is the same as £80 for Sky.
Its not that they think "I havent got the money for a new car, but i really want one so i'm going to lease it", they think "For £250 a month I can get this new car...."Subtle difference.
Don't get me wrong, lease deals make a lot more sense these days, infact there are some genuinely good deals to be had even when someone weighs it up vs an outright purchase.
Buying new outright makes most sense when one plans to keep the car many years.
nicanary said:
I get your point. I'm dubious whether someone who's been driving something classy for the last umpteen years will be happy buying a shed for the rest of his life.
I don't get knocked by depreciation - I buy a 1-year old car with lowish mileage and known provenance, keep it 3 years, and then trade in for another. No cash added. At retirement I will either keep it and run it into the ground, or trade in for a small city-car. I've never owned a car more than 4 years old, and I don't feel any sort of need to buy a new one anyway. The cars I buy are still under warranty.
Again, projecting your prejudices and mis-beliefs onto someone else to justify your point.I don't get knocked by depreciation - I buy a 1-year old car with lowish mileage and known provenance, keep it 3 years, and then trade in for another. No cash added. At retirement I will either keep it and run it into the ground, or trade in for a small city-car. I've never owned a car more than 4 years old, and I don't feel any sort of need to buy a new one anyway. The cars I buy are still under warranty.
Do you really think there is going to be a First World problem in the future when retired people have to slum it in used cars instead of leased 3 series? Oh the humanity!
wemorgan said:
"New Cars - is Leasing going to become the new norm"
6 pages in and it seems as if the answer is, no leasing wont become the new norm for all the reasons that have been discussed.
Leasing is just another choice that consumers have been given that wasn't previously available. it clearly wont suit all.
I think its a lot closer than you think. Those nay sayers on here dont buy new cars anyway, so hardly representative.6 pages in and it seems as if the answer is, no leasing wont become the new norm for all the reasons that have been discussed.
Leasing is just another choice that consumers have been given that wasn't previously available. it clearly wont suit all.
I dont think its necesarily a bad thing. It keeps new cars coming onto the used market, and people who want a new car get a decent deal without having to worry about trade ins / selling privately / etc,etc
Justin Case said:
Look at the other end of the market and the sums work the other way round; I went by the local Fiat dealer on the way home and they had a new Panda at the front, £99 down and £99 per month (didn't say what the period was though) A decent secondhand Panda will only cost about £4k less than a new one so no great saving to be had there (in Mercedes terms so leasing/PCP looks a no-brainer.
On the other hand a decent secondhand E class can be had for £15k, a saving of £25k on new, and that has to be covered by the original owner or leasing company one way or another.
So perhaps leasing will be become the norm for cheaper cars rather than expensive ones, or am I making the mistake of believing that folk think logically
It'll become the norm on exec stuff first, simply because of the amount of hard cash it would take - or a massive repayment loan - over three years to buy it outright, as opposed to a couple of hundred a month on a three year loan for a new panda. so leasing/PCP looks a no-brainer.On the other hand a decent secondhand E class can be had for £15k, a saving of £25k on new, and that has to be covered by the original owner or leasing company one way or another.
So perhaps leasing will be become the norm for cheaper cars rather than expensive ones, or am I making the mistake of believing that folk think logically
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