New Cars - is Leasing going to become the new norm?

[otolith]

Mr Tidy said:

What is that saying, "neither a borrower nor a lender be"?

If you adhere to that dictum, you either save up or lease. Doesn't say "don't be a renter". And if you still have a mortgage, leasing is the only consistent option!

[talksthetorque]

Mr Tidy said:

Probably, if everyone wants the current plate every 2 or 3 years!

And it seems to be the new norm to have to have something before you can pay for it!

If a company offers you a car for £x per month and you can afford £x per month, you can pay for it.

You are just paying for it as you use it - and not up front before you use it.
It's like ( ok not really like, but a bit like ) saying you shouldn't join a Gym for £40 per month, because you can't afford to buy a Rower, Treadmill, Cross Trainer, a few weights and a swimming pool.

Mr Tidy said:

Have also paid off the mortgage now, and although it's only a smallish house being debt-free is just such a happy place to be!

What is that saying, "neither a borrower nor a lender be"?

I think that wins an award for the quickest self contradiction of the day - 21 words later......

We have just bought our house without a Mortgage, and I lease a car (which is essential for my work)
If I had bought the same car cash, I would be worse off financially with the depreciation of the car than with the cost of the lease, plus I would have a Mortgage.
If I paid the Mortgage off at the same repayment per month as the car lease cost is - it would get paid off in 10 years, by which time my car (that I couldn't afford to replace in between) would have 300,000 miles on the clock.

[Mr Tidy]

otolith said:

Mr Tidy said:

What is that saying, "neither a borrower nor a lender be"?

If you adhere to that dictum, you either save up or lease. Doesn't say "don't be a renter". And if you still have a mortgage, leasing is the only consistent option!

Quite possibly true - just a good feeling to escape the hamster wheel! Mind you it has taken a long time to do so.

[gizlaroc]

Mikeyjae said:

gizlaroc said:

You pull your socks up a bit and work a bit harder. Obviously.

Really?

Yeah, this is Pistonheads after all.

[Granfondo]

gizlaroc said:

Mikeyjae said:

gizlaroc said:

You pull your socks up a bit and work a bit harder. Obviously.

Really?

Yeah, this is Pistonheads after all.

[daemon]

nicanary said:

Justin Case said:

Comparing like for like there is probably very little in it and it just comes down to your individual preference. Unfortunately most people here aren't comparing like for like, mainly to prove their point.

But the OP asks "is it going to be the norm?". After much debate, the answer is probably "no" because it doesn't suit everybody.

Probably an easy 75% of new cars are "bought" on PCP, how many of those could be bought on a lease deal next time, particularly if it meant cheaper payments?

[Frankthered]

daemon said:

nicanary said:

Justin Case said:

Comparing like for like there is probably very little in it and it just comes down to your individual preference. Unfortunately most people here aren't comparing like for like, mainly to prove their point.

But the OP asks "is it going to be the norm?". After much debate, the answer is probably "no" because it doesn't suit everybody.

Probably an easy 75% of new cars are "bought" on PCP, how many of those could be bought on a lease deal next time, particularly if it meant cheaper payments?

This is sort of the point I was making earlier in the thread. We have a QQ on PCP at about £250 per month. At the time, could have got a lease over the same period at about £200 per month with a broadly similar deposit/initial payment. As most people tend to use PCP like a lease - effectively doing the next PCP deal as the old one expires - it does seem that if dealers were to push leasing a bit more, more people would be tempted by the lower monthly payment.

On reflection, I'm probably a bit more comfortable with the flexibility of the PCP and it does seem that dealers really want to push the PCP option, so maybe the answer to the OP is PCP is king for now. (I did try to get the dealer to give me a quote for HP several times during the negotiation, but it fell on deaf ears!)

[gizlaroc]

The dealers will push PCP as they have a chance to get your business next time, they can offer you over your balloon payment to try and tempt you into a new deal, they can also call you at 18-24months in and say "Mr. Smith, would you like to be in a brand new car for only £20 a month more?" and they can tell you that "although the GFV is £15k we expect it to be worth more like £18k so you should get your deposit back at the end to start again."

With a contract hire deal the customer can do nothing other than hand the keys back to a collection driver on the agreed date.
6 months before the deal ends they are free to look for the next cheapest deal whomever that may be with.

PCP is king for dealers, they hate the contract hire brokers that are popping up all over the place.

[nickfrog]

So cash seems the most flexible approach.

[gizlaroc]

nickfrog said:

So cash seems the most flexible approach.

Most flexible but most expensive.

The manufacturer contributions seem to outweigh the interest you pay with pcp.

[anonymous-user]

clarki said:

I've been PCP'ing my everyday car for years (currently an Evoque). Think i'll lease next time (fancy a 5 series next). I don't want to own it, just want a nice, modern, reliable, comfy car that gets changed every 3 years and costs what it says on the tin. Never going to get attached to the thing.

My weekend car I buy. It tends to be a bit older, something I can tinker with, something I want to own and I do tend to get attached to.

Horses for courses I guess.

Good post and sums it up nicely.

[Tractor lad]

gizlaroc said:

Most flexible but most expensive.

The manufacturer contributions seem to outweigh the interest you pay with pcp.

Not for our M135i or our VW. Or the other cars we've bought new.

What seems to be forgotten is that cash buyers usually haggle the nuts off RRP. Leasers always seem to compare lease costs to full RRP.
We got £6k off list for the BM, £7.5k for the VW, lots of the other new cars (not many) we've bought.

Anyway we all love cars, who gives a stuff if they cost a bit to own and run? If that's the only worry, take up antique furniture restoration or similar.

[nickfrog]

gizlaroc said:

nickfrog said:

So cash seems the most flexible approach.

Most flexible but most expensive.

The manufacturer contributions seem to outweigh the interest you pay with pcp.

Not really. Cheapest by quite a margin for me on both Qashqai and M135i. The discounts for cash are humongous, often through brokers. The finance contributions are also available to cash buyers who can settle at no fees immediately.
This is NOT always the case however but if it's for a family generic box, I'll just go for the cheapest accross all finance methods. CX5 is another example where cash is massively cheaper.

[gizlaroc]

Tractor lad said:

Not for our M135i or our VW. Or the other cars we've bought new.

nickfrog said:

Not really. Cheapest by quite a margin for me on both Qashqai and M135i.

My mate jumped on the £179 + vat deal on the M135i, that was with £1900 down including vat, but at £216 a month that is pretty good for a new car. That had auto and Nav but nothing else I don't think.
£6900 it is costing him over the two years, and 24k miles he has got it for.


But obviously you have to look at every deal separately, there is no right or wrong. If you were to buy an M135i today cash would probably be cheaper.

[gizlaroc]

Now looking at around £10200 for 3 years in an M135i auto.



https://www.contracthireandleasing.com/car-leasing...


You can buy that car new for under £26k....


http://www.coast2coastcars.co.uk/car-quote/?manufa...

I reckon in 3 years you would easily get £15k back on it, so yeah, cheaper to buy cash.

But not much in it and some people prefer to know exactly what it is costing each month rather than the flexibility of being able to sell when you want.

Personally there is just no way I could put £26,000 worth of money into a car and watch it dwindle away each month. I know that may sound crazy but £500 a month I don't notice, knowing a car I just bought for £40,000 is sitting there worth £30,000 would keep me awake at night.

[J4CKO]

chrispmartha said:

J4CKO said:

I like the idea of leasing but my issues with it are that, correct me if I am wrong,

You cant mess about with your purchase.

It has to be new really

It seems to be geared strongly towards German, and/or diesel Stuff

It is never quite as cheap as it seems

I dont do enough miles.


But, if I need a daily for doing proper mileage, then I would consider it.

When you lease you don't have a 'purchase'

Exactly !

[Dr Jekyll]

gizlaroc said:

Personally there is just no way I could put £26,000 worth of money into a car and watch it dwindle away each month. I know that may sound crazy but £500 a month I don't notice, knowing a car I just bought for £40,000 is sitting there worth £30,000 would keep me awake at night.

This is the reasoning I can never understand.

[gizlaroc]

If i had £250k in the bank maybe I would think differently, but I haven't, so a massive chunk of my savings would go into 'buying' a new car.

My money would be sat there tied up in a car.

I guess the answer is save the £500 a month I am happy to loose on a car until I have the £30-40k I need. But that would be at least 5 years and I can't see the point if I can be in one now for the same amount of money each month as it would be depreciating at anyway.

I also think monthly payments make you really stop and think what a car is loosing each month, where as when I bought my 5 Series with cash I was never really sure until I had to sell it, and then the reality hit home. It was at that point I started financing them and that allowed me to set a limit to what I was prepared to 'waste' on a car each month.


I also started to use finance to get into newer cars, buy a 3 year old one for £20k cash and loose maybe £350 a month in depreciation or lease a brand new one and pay maybe £400 a month in rentals.
The new car had no warranty issues, servicing much cheaper, better MPG and all the benefits of being in a new car vs an older one. The extra it cost each month is easily recovered in savings elsewhere.


Different strokes for different folks.

The only thing that is right is what you feel happier doing.

[gizlaroc]

I think that also, when I was employed I never really thought about 'what if...' as much, so using savings etc. was not so worrying. When I started to run my business my view changed, I could see some months we were seriously in the black, where as a couple of months of poor trade meant we were seriously in the red, using savings to buy a car then seemed idiotic to me, far better to lease, and if the worst happens throw the keys back.

[acme]

gizlaroc said:

I think that also, when I was employed I never really thought about 'what if...' as much, so using savings etc. was not so worrying. When I started to run my business my view changed, I could see some months we were seriously in the black, where as a couple of months of poor trade meant we were seriously in the red, using savings to buy a car then seemed idiotic to me, far better to lease, and if the worst happens throw the keys back.

Possibly this has been noted already, but can you throw the keys back? I assume you're talking worst case scenario ie bankruptcy, but assume the basics are as per a mortgage?

Some of the deals which are occasionally noted do seem almost too good to be true. Perhaps this shows us just how much money the manufacturers are making? Or that second hand they can also
make a good profit out of them?