Why are Lease Deals Frowned Up Particularly on Prestige Cars
Discussion
Tractor lad said:
Yep; almost a house in the bank, we get to live in lovely houses, we pay no interest to hateful banks, we get on with our landlord, we claim a good chunk of rent and bills back den our business (in turn our business has a cheap office with sea views), the houses we rent are always fully owned so no worries about paying someone else's mortgage, houses here are just a rip off, there'll be a massive crash soon, if not we'll just buy something in France when the kids leave, we are also in line for a healthy inheritance one day, we pay far less rent than the interest on a mortgage, no worries, stuff gets repaired for "free'" we refuse to join the insane property ladder nonsense, we make money with our business, many friends and relatives have lost a fortune on houses as well as some making money, our country relies on pretending it's rich because of the utterly ridiculous housing market and it's killed our economy.
Basically no debt, no paying any interest to the villain banks, total freedom and flexibility, happy kids and the joy of not doing what 99% of the public do.
Flower it up how you like but I can't see renting for 20 years has been a good idea. If you'd bought 20 years ago on a mortgage you'd have had it paid off by now and is almost guaranteed to be worth several times what it would have cost thenBasically no debt, no paying any interest to the villain banks, total freedom and flexibility, happy kids and the joy of not doing what 99% of the public do.
Now you're stuck with hoping there's a severe market crash so that you can buy or waiting for a relative to die to get the extra cash so that you're not renting into your retirement years.
But hey ho at least your car is paid for.
daemon said:
Typing in a smart phone with one finger. Would need to be on a laptop. Home tomorrow pm so will have a look then
Good stuff, be interested to see - I'm of the 'you don't get something for nothing' school of thought...or as an analogy energy can neither be created or destroyed only transformed if you see what I mean i.e. someone in the chain is paying for it and taking the hit. Maybe it's like Canon selling cheap printers and then re-couping it by charging a fortune every time you have to buy ink ....e.g. discount Golf R's to leasing companies so that in 3 years time there are loads of them in the system that need servicing..maybe they're playing the long game
Granfondo said:
daemon said:
Granfondo said:
Finance works best for people that DON'T need it! 
And for people like you who use it but pretend you don't 
I'll let people decide if I have a second hand datsun or not and what I do for a living from my profile. Pity you had to remove all yours. A bit embarrassed were you?
Edited by daemon on Saturday 4th July 17:17
Edited by daemon on Saturday 4th July 17:19
daemon said:
Granfondo said:
daemon said:
Granfondo said:
Finance works best for people that DON'T need it!
And for people like you who use it but pretend you don't I'll let people decide if I have a second hand datsun or not and what I do for a living from my profile. Pity you had to remove all yours. A bit embarrassed were you?
Edited by daemon on Saturday 4th July 17:17
Edited by daemon on Saturday 4th July 17:19
M5Fan said:
The topic is too open-ended imo. You need to define some specific scenarios....e.g.
Scenario 1.
Bob wants a new M5.
Bob also wants another new car after 3 years of driving the M5 (Bob's got cash to burn..)
Bob has enough cash in the bank to buy an M5 outright.
Bob does 12k miles a year.
Bob can expect a 5% discount off RRP if paying by cash.
There is 1 years free servicing regardless of how the car is obtained.
What else needs to be taken into account - Bob is able to invest the money elsewhere, servicing, tax, estimated value after 3 years ???
Is Bob better of financially (i) buying the car outright (ii) using a PCP deal (iii) using a lease deal (iv) there is no difference (!)
Can someone plug some real numbers in - is this enough to answer this scenario (I've never leased , what else needs to be considered e.g. gap insurance?)
They'll have questions like this in GCSE Maths one day (Bob isn't me by the way
)
It's not the greatest example because M5 sales are supported by BMW offering 0% finance and fairly hefty discounts irrespective of payment method. It would come down to whether there were decent lease deals at that time. A few years ago they were leasing for about £500+VAT, presumably 6+23, which I'd estimate is a bit cheaper than buying one at current discounts. But current lease rates are higher than that I believe...Scenario 1.
Bob wants a new M5.
Bob also wants another new car after 3 years of driving the M5 (Bob's got cash to burn..)
Bob has enough cash in the bank to buy an M5 outright.
Bob does 12k miles a year.
Bob can expect a 5% discount off RRP if paying by cash.
There is 1 years free servicing regardless of how the car is obtained.
What else needs to be taken into account - Bob is able to invest the money elsewhere, servicing, tax, estimated value after 3 years ???
Is Bob better of financially (i) buying the car outright (ii) using a PCP deal (iii) using a lease deal (iv) there is no difference (!)
Can someone plug some real numbers in - is this enough to answer this scenario (I've never leased , what else needs to be considered e.g. gap insurance?)
They'll have questions like this in GCSE Maths one day (Bob isn't me by the way
)At least Bob could, in this case, take the finance and then make a legitimate claim on PH that his investment yields are greater than the credit costs.
I'm about to take delivery of a leased Seat Leon FR 184 DSG tomorrow, I did a comparison between the leasing costs and running my current (09 Renault Laguna coupe)
Everything considered including interest, conservative maintence costs the new lease car is just £1000 more expensive than runing my current car over two years or £40 more per month (Roughly the cost of the automatic option my current car doesnt have) Lets face it, a 6 year old Renault could easily have repair costs over £600 that I have estimated over 2 years.
The new lease car is cheaper to insure, no RFL to pay, fully maintianed deal.
When I looked at doing a PCP on new and used Leon FR's it was still more expensive than leasing.
So I fancy a new car, fixed cost motoring with no big upfront payments or final payments really appeals.
I'm now receiving a £4k car allowance which after tax covers 80% of the leasing costs.
For me, leasing was a real no brainer!
Admitably, before looking into it I thought leasing was stupid...I'm fully converted now!
Everything considered including interest, conservative maintence costs the new lease car is just £1000 more expensive than runing my current car over two years or £40 more per month (Roughly the cost of the automatic option my current car doesnt have) Lets face it, a 6 year old Renault could easily have repair costs over £600 that I have estimated over 2 years.
The new lease car is cheaper to insure, no RFL to pay, fully maintianed deal.
When I looked at doing a PCP on new and used Leon FR's it was still more expensive than leasing.
So I fancy a new car, fixed cost motoring with no big upfront payments or final payments really appeals.
I'm now receiving a £4k car allowance which after tax covers 80% of the leasing costs.
For me, leasing was a real no brainer!
Admitably, before looking into it I thought leasing was stupid...I'm fully converted now!
daemon said:
M5Fan said:
The topic is too open-ended imo. You need to define some specific scenarios....e.g.
Scenario 1.
Bob wants a new M5.
Bob also wants another new car after 3 years of driving the M5 (Bob's got cash to burn..)
Bob has enough cash in the bank to buy an M5 outright.
Bob does 12k miles a year.
Bob can expect a 5% discount off RRP if paying by cash.
There is 1 years free servicing regardless of how the car is obtained.
What else needs to be taken into account - Bob is able to invest the money elsewhere, servicing, tax, estimated value after 3 years ???
Is Bob better of financially (i) buying the car outright (ii) using a PCP deal (iii) using a lease deal (iv) there is no difference (!)
Can someone plug some real numbers in - is this enough to answer this scenario (I've never leased , what else needs to be considered e.g. gap insurance?)
They'll have questions like this in GCSE Maths one day (Bob isn't me by the way)
That scenario is heavily skewed towards leasing or a pcp deal being the cheapest way of driving the car.Scenario 1.
Bob wants a new M5.
Bob also wants another new car after 3 years of driving the M5 (Bob's got cash to burn..)
Bob has enough cash in the bank to buy an M5 outright.
Bob does 12k miles a year.
Bob can expect a 5% discount off RRP if paying by cash.
There is 1 years free servicing regardless of how the car is obtained.
What else needs to be taken into account - Bob is able to invest the money elsewhere, servicing, tax, estimated value after 3 years ???
Is Bob better of financially (i) buying the car outright (ii) using a PCP deal (iii) using a lease deal (iv) there is no difference (!)
Can someone plug some real numbers in - is this enough to answer this scenario (I've never leased , what else needs to be considered e.g. gap insurance?)
They'll have questions like this in GCSE Maths one day (Bob isn't me by the way
)I would say that a lot of leasing deals arent that good and therfore cost effective, however if there is a good deal on (Or maybe your arent too fussed or set ona particular make/model) then I think leasing can be fairly efficient. Though like me (See my above post) you may have to accept that you will pay a small premium for leasing in exchange for the emotional/financial incentives, ie fixed cost motoring, no large downpayments (if you do the right deal) no hassle of selling a car once you are in the lease cycle, luxury of a brand new car with the latest safety, no MOT's, latest toys and frankly desireability.
EB89 said:
All very well and good for "Bob" but the diference between leasing, buying with cash, pcp, buying an older car with cash etc vary greatly depending on indivdual circumstances.
I would say that a lot of leasing deals arent that good and therfore cost effective, however if there is a good deal on (Or maybe your arent too fussed or set ona particular make/model) then I think leasing can be fairly efficient. Though like me (See my above post) you may have to accept that you will pay a small premium for leasing in exchange for the emotional/financial incentives, ie fixed cost motoring, no large downpayments (if you do the right deal) no hassle of selling a car once you are in the lease cycle, luxury of a brand new car with the latest safety, no MOT's, latest toys and frankly desireability.
A very sensible post.I would say that a lot of leasing deals arent that good and therfore cost effective, however if there is a good deal on (Or maybe your arent too fussed or set ona particular make/model) then I think leasing can be fairly efficient. Though like me (See my above post) you may have to accept that you will pay a small premium for leasing in exchange for the emotional/financial incentives, ie fixed cost motoring, no large downpayments (if you do the right deal) no hassle of selling a car once you are in the lease cycle, luxury of a brand new car with the latest safety, no MOT's, latest toys and frankly desireability.
It's a seriously expensive lifestyle choice, but there are real upsides for lots of people and they are prepared to pay the high cost.
whoami said:
Zyp said:
Tractor lad said:
Just imagine the madness of renting a house but buying cars for cash...
Oh hang on...
Hello Vlad / Matt Oh hang on...
daemon said:
Flower it up how you like but I can't see renting for 20 years has been a good idea. If you'd bought 20 years ago on a mortgage you'd have had it paid off by now and is almost guaranteed to be worth several times what it would have cost then
Now you're stuck with hoping there's a severe market crash so that you can buy or waiting for a relative to die to get the extra cash so that you're not renting into your retirement years.
But hey ho at least your car is paid for.
Oh thanks for the sage advice. We also wouldn't have been able to jump on numerous opportunities, we also wouldn't have the business we have today, we wouldn't have the rather amazing lifestyle. We'd be stuck in Bristol with a rubbish house. Rather than in a 5 bed house overlooking the sea that we might well buy one day.Now you're stuck with hoping there's a severe market crash so that you can buy or waiting for a relative to die to get the extra cash so that you're not renting into your retirement years.
But hey ho at least your car is paid for.
I've heard the housing rubbish time and time again; we KNOW about the market, we have chosen another route. It upsets people that we could have bought a house but have instead decided to keep a house in the bank waiting either for the right place to come up or to emigrate with a chunk of money (or maybe something else?); it's just not been for us and I Iove the way people get so indignant. I pay nothing to the banks. I pay no interest. I have no debts (many forget that a mortgage is a huge loan). We don't obey "the system" Sorry if we haven't crawled up some ladder of debt and DIY but hey ho, most of Europe seems fine with it. So are we. We also have a big safety net if needed. Most home "owners" live on a precarious cliff edge. Of course we'd love to own the right house outright but that hasn't come up yet and we refuse to get a massive mortgage to maintain the same lifestyle except with non stop maintenance costs. It's not the norm but it works for us; why attack it?
Whoami; contribute or get a life fella.
Edited by Tractor lad on Saturday 4th July 21:22
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