Anyone still buying rather than leasing their car?
Discussion
jayemm89 said:
SWoll said:
For me the 'buy a new car and keep it for 10 years' thing just doesn't work. After 3 years the lack of factory warranty, increasing servicing and maintenance costs and old technology just aren't something I want to have to put up with every day for the sake of a few £ as life is too short.
There is a huge choice of nice cars in the £250-300 pm leasing bracket (Golf R, M240i, C Class, E Class, XF etc.) and personally I'm more than happy to pay that in order to have a new vehicle every 2-3 years that is spec'd exactly as we want it, has never been used/abused by another owner and that causes us no bother whatsoever.
Please keep doing this or I won't be able to buy the same cars three years later for a quarter of their original price There is a huge choice of nice cars in the £250-300 pm leasing bracket (Golf R, M240i, C Class, E Class, XF etc.) and personally I'm more than happy to pay that in order to have a new vehicle every 2-3 years that is spec'd exactly as we want it, has never been used/abused by another owner and that causes us no bother whatsoever.
EDIT - Just checked and unfortunately it appears that 3 year old 135i coupe's are still fetching £20k+, so maybe not then..
Sheepshanks said:
It's the "spec'd exactly as we want it" bit that can kill leasing - I got my Merc nearly new and effectively got its £7K of options free. When I've priced up options on lease cars the cost becomes ridiculous - normally you're pretty well paying the whole option cost during the lease.
All depends on what you want I suppose. I always go for the model in the range with the right spec and tbh I'm not one for going overboard with the tick boxes.Edited by SWoll on Saturday 1st October 20:56
Edited by SWoll on Saturday 1st October 21:13
So a £10-£12k car costs £215 per month in depreciation and a £25k car is likely to cost £425 per month. It appears that as a rule of thumb if you double the price of a car you double the depreciation. I haven't got any figure for leasing, but does the same ratio apply? If so you can at least safely say that the nominal price of the car has more to do with the monthly cost than whether it is bought or leased.
i think the discounts to lease companies are greater than any cash discount allowed in the retail market, esp to manufacturer lease arms.
this stops the brand being devalued, keeps s/h prices higher than they might otherwise be and also allows upgrade opportunities to an existing customer in 2/3 yrs rather than losing contact with the customer and having them change on their own timescale.
this stops the brand being devalued, keeps s/h prices higher than they might otherwise be and also allows upgrade opportunities to an existing customer in 2/3 yrs rather than losing contact with the customer and having them change on their own timescale.
Justin Case said:
So a £10-£12k car costs £215 per month in depreciation and a £25k car is likely to cost £425 per month. It appears that as a rule of thumb if you double the price of a car you double the depreciation. I haven't got any figure for leasing, but does the same ratio apply? If so you can at least safely say that the nominal price of the car has more to do with the monthly cost than whether it is bought or leased.
I'd be fairly confident you could lease a £25K car for an awful lot less than £425 a monthjayemm89 said:
One thing I will say... certain dealers make it bloody difficult to get a price that isn't calculated in monthly payments!
Very true. Had a look at a couple of new cars yesterday. Both dealers did not want to entertain any sort of conversation about the actual list price.daemon said:
Justin Case said:
So a £10-£12k car costs £215 per month in depreciation and a £25k car is likely to cost £425 per month. It appears that as a rule of thumb if you double the price of a car you double the depreciation. I haven't got any figure for leasing, but does the same ratio apply? If so you can at least safely say that the nominal price of the car has more to do with the monthly cost than whether it is bought or leased.
I'd be fairly confident you could lease a £25K car for an awful lot less than £425 a monthI can't be bothered to do all the maths, but. BMW 320i is about £400 pcm, and £26k, so inline with the vague numbers given.
I find it comes down to the mileage you do in your cars, and I also think the second term of leasing is the killer compared to holding an original purchased car for a 4 year period . Have looked at leasing, but can't find it would work for me.
If I purchase a SEAT Leon 1.6 tdi new @ £19400 and do my usual 25k miles pa in it, then after 2 years it's gonna have residuals of around the £9400 mark according to AT. So £10k loss.
Leasing for 2 years @25 thou miles a year equates to a rental figure of £11400, so circa £1400 more than above.
3rd and 4th year ownership of the purchased car, drops the residual value to around the £5400 mark with 100k on the mileage, so another £4000 loss, total loss = £14000 over 4 years.
Say the 2nd two year lease deal costs the same again, £11400, then total for the 4 years rental is £22800.
OK you get 1 more year warrantied with the lease deal, over the 3 year purchased cars SEAT warranty, but just stick it on the AA parts and labour for £70 for that 4th year.
Not deriding the lease deals, I see why they work for lower mileage users, but even at 10 thou miles a year, the lease price only reduces to around £10000 'ish.
If I purchase a SEAT Leon 1.6 tdi new @ £19400 and do my usual 25k miles pa in it, then after 2 years it's gonna have residuals of around the £9400 mark according to AT. So £10k loss.
Leasing for 2 years @25 thou miles a year equates to a rental figure of £11400, so circa £1400 more than above.
3rd and 4th year ownership of the purchased car, drops the residual value to around the £5400 mark with 100k on the mileage, so another £4000 loss, total loss = £14000 over 4 years.
Say the 2nd two year lease deal costs the same again, £11400, then total for the 4 years rental is £22800.
OK you get 1 more year warrantied with the lease deal, over the 3 year purchased cars SEAT warranty, but just stick it on the AA parts and labour for £70 for that 4th year.
Not deriding the lease deals, I see why they work for lower mileage users, but even at 10 thou miles a year, the lease price only reduces to around £10000 'ish.
Edited by icepop on Monday 3rd October 00:36
icepop said:
"(Next up, as of last week an Audi S1. Cost £25500. To justify, this included the 5year warranty and this car will be run for 5years.
Expected value in 5yrs = £5k)"
Hey, I'll give you £5k for that S1 in 5 years time !!!
I was going to say the same. I would reckon even a high mileage 5 year old S1 will be sitting in the region of £10K.Expected value in 5yrs = £5k)"
Hey, I'll give you £5k for that S1 in 5 years time !!!
Shows how 'old school' I am!
Almost 50 and I've never had a loan or finance in my life.
Buy my cars cash and tend to keep them for a while.
Currently own a 1985 911 (for 16 years), 2004 Z4 (for 8 years) and my daily use van (for 7 years)
I put aside some money every week.
When there's enough and I see something I like - I'll buy it.
Deposit goes down on a new WRX STi next month with planned delivery on 1st April next year - again a cash purchase.
Reckon including the discount I wrangled and the interest on the money I have put away - all in I've saved approx 1/3 off the list price.
To pay list then pay interest on top of that isn't the best way surely?
Almost 50 and I've never had a loan or finance in my life.
Buy my cars cash and tend to keep them for a while.
Currently own a 1985 911 (for 16 years), 2004 Z4 (for 8 years) and my daily use van (for 7 years)
I put aside some money every week.
When there's enough and I see something I like - I'll buy it.
Deposit goes down on a new WRX STi next month with planned delivery on 1st April next year - again a cash purchase.
Reckon including the discount I wrangled and the interest on the money I have put away - all in I've saved approx 1/3 off the list price.
To pay list then pay interest on top of that isn't the best way surely?
If the car is white goods, there are great lease deals to be had if you don't mind buying late in the cars life or model cycle. Just ordered a new baby chariot for the wife a VW Toureg R Line Plus fully loaded (pretty much) and metallic for 3.4 down 348 pm over 2 hrs 10k. Comes in at 11.5k all in. Compared to the outgoing BMW, which dropped 21k in the same period seems a bargain. And the BMW was a 38k car new, but only offered 17 @ trade in.
Peace of mind and the fact that with family needs change every few years make it worth while. But looking around there certainly isn't a linear calculation to be done, the biggest variance factor is the manufacturer to lease co discount
Peace of mind and the fact that with family needs change every few years make it worth while. But looking around there certainly isn't a linear calculation to be done, the biggest variance factor is the manufacturer to lease co discount
I bought my wife's freelander - 14 plate Dynamic.
I got an extra 2 year's warranty and 0% finance over 2 years in the deal so in effect I'm using some of their money to pay for it. We'll keep this until it dies and there's plenty of good indies round here once it's out of warranty. So for me this deal made sense.
I leased my C-Class estate as versus a PCP over 2 years it was about 7K cheaper to lease than PCP (back in Oct 2015)
Swings and roundabouts...
I got an extra 2 year's warranty and 0% finance over 2 years in the deal so in effect I'm using some of their money to pay for it. We'll keep this until it dies and there's plenty of good indies round here once it's out of warranty. So for me this deal made sense.
I leased my C-Class estate as versus a PCP over 2 years it was about 7K cheaper to lease than PCP (back in Oct 2015)
Swings and roundabouts...
juice said:
I bought my wife's freelander - 14 plate Dynamic.
I got an extra 2 year's warranty and 0% finance over 2 years in the deal so in effect I'm using some of their money to pay for it. We'll keep this until it dies and there's plenty of good indies round here once it's out of warranty. So for me this deal made sense.
I leased my C-Class estate as versus a PCP over 2 years it was about 7K cheaper to lease than PCP (back in Oct 2015)
Swings and roundabouts...
0% interest is never interest free, they've loaded the interest into the price you paid then hoodwinked you into thinking you're paying no interest... Rule 1 of anything 0% interest. I got an extra 2 year's warranty and 0% finance over 2 years in the deal so in effect I'm using some of their money to pay for it. We'll keep this until it dies and there's plenty of good indies round here once it's out of warranty. So for me this deal made sense.
I leased my C-Class estate as versus a PCP over 2 years it was about 7K cheaper to lease than PCP (back in Oct 2015)
Swings and roundabouts...
Gregmitchell said:
0% interest is never interest free, they've loaded the interest into the price you paid then hoodwinked you into thinking you're paying no interest... Rule 1 of anything 0% interest.
Well it was the cheapest 14 plate Dynamic by a way that I could find and I looked at loads ! The 0% was only on 5K of the balance so I paid the rest (after the normal haggling). I was going to pay the full amount when they mentioned the 0% almost as an after thought, so I figured I'd use their money rather than my own. Sheepshanks said:
It's the "spec'd exactly as we want it" bit that can kill leasing - I got my Merc nearly new and effectively got its £7K of options free. When I've priced up options on lease cars the cost becomes ridiculous - normally you're pretty well paying the whole option cost during the lease.
Which confirms what Ive always thought, options are almost worthless when in comes back to trade in time.icepop said:
I find it comes down to the mileage you do in your cars, and I also think the second term of leasing is the killer compared to holding an original purchased car for a 4 year period . Have looked at leasing, but can't find it would work for me.
If I purchase a SEAT Leon 1.6 tdi new @ £19400 and do my usual 25k miles pa in it, then after 2 years it's gonna have residuals of around the £9400 mark according to AT. So £10k loss.
Leasing for 2 years @25 thou miles a year equates to a rental figure of £11400, so circa £1400 more than above.
3rd and 4th year ownership of the purchased car, drops the residual value to around the £5400 mark with 100k on the mileage, so another £4000 loss, total loss = £14000 over 4 years.
Say the 2nd two year lease deal costs the same again, £11400, then total for the 4 years rental is £22800.
OK you get 1 more year warrantied with the lease deal, over the 3 year purchased cars SEAT warranty, but just stick it on the AA parts and labour for £70 for that 4th year.
Not deriding the lease deals, I see why they work for lower mileage users, but even at 10 thou miles a year, the lease price only reduces to around £10000 'ish.
This isn't great maths, a savvy leaser would not pay £475 per month for a bottom of the range Leon. For example, at 25k pa, a Golf GTD can currently be had for £8652 over 2 years, or £360 per month. Is this cheaper than you buying a bottom of the range Leon outright? No, but it's a better car and frankly it wouldn't take too much of a surprise bill in Y4 for any saving to be wiped out, this also assumed you will find someone who wants to pay £5400 for a Leon with 100k on the clock. If I purchase a SEAT Leon 1.6 tdi new @ £19400 and do my usual 25k miles pa in it, then after 2 years it's gonna have residuals of around the £9400 mark according to AT. So £10k loss.
Leasing for 2 years @25 thou miles a year equates to a rental figure of £11400, so circa £1400 more than above.
3rd and 4th year ownership of the purchased car, drops the residual value to around the £5400 mark with 100k on the mileage, so another £4000 loss, total loss = £14000 over 4 years.
Say the 2nd two year lease deal costs the same again, £11400, then total for the 4 years rental is £22800.
OK you get 1 more year warrantied with the lease deal, over the 3 year purchased cars SEAT warranty, but just stick it on the AA parts and labour for £70 for that 4th year.
Not deriding the lease deals, I see why they work for lower mileage users, but even at 10 thou miles a year, the lease price only reduces to around £10000 'ish.
Edited by icepop on Monday 3rd October 00:36
The GTD above is by no means the cheapest lease car either.
FWIW, Depending on the car I will either lease, PCP or buy - if you know what you're actually calculating, and your requirements, rather than simply holding onto whatever view on "finance" has been instilled in you, any of the three can work. Unless the car purchase is a small percentage of your net worth (not the case for most), ploughing most of your savings into a depreciating asset makes very little sense. In many cases, leaving this earning interest somewhere and paying the monthlies, even if they come from the savings balance, will work out well, whilst leaving your capital liquid in case of a rainy day.
To me leasing is worth doing if either the monthly cost is almost a no brainer, chap I know picked up a Seat Leon Cupra-R for somethings ike £120 a month! Between him and his wife that's a hell of a lot of car for not a huge outgoing.
Personally I wouldn't want to be paying out more than that on anything that I wasn't going to actually own by the end of it. That is just me though but I bought a Merc CLS which is now 9 years old but offers a lot more than similarly priced newer cars. I'd rather find a really below average mileage higher end car and pay that off per month than pay the same amount on a new car but hand it back afterwards. The last car I bought new was a Twingo 133 which I paid off monthly on HP but for what I paid for it I'd have got a Megane 250 and handed it back, I didn't like that idea!
For the used car market it can't be a bad thing though. My mum picked up an Audi A1 which I assume was on a lease as it was three years old, very low mileage and mint.
Personally I wouldn't want to be paying out more than that on anything that I wasn't going to actually own by the end of it. That is just me though but I bought a Merc CLS which is now 9 years old but offers a lot more than similarly priced newer cars. I'd rather find a really below average mileage higher end car and pay that off per month than pay the same amount on a new car but hand it back afterwards. The last car I bought new was a Twingo 133 which I paid off monthly on HP but for what I paid for it I'd have got a Megane 250 and handed it back, I didn't like that idea!
For the used car market it can't be a bad thing though. My mum picked up an Audi A1 which I assume was on a lease as it was three years old, very low mileage and mint.
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