Anyone still buying rather than leasing their car?
Discussion
Just bought a 5 year old X1
Looked long and hard at leasing but given I do 25k a year the numbers just didn't add up - I also didn't like the idea of being committed to that expenditure for 3 years, at least buying in cash if anything happens I can sell the car and realise some money.
Looked long and hard at leasing but given I do 25k a year the numbers just didn't add up - I also didn't like the idea of being committed to that expenditure for 3 years, at least buying in cash if anything happens I can sell the car and realise some money.
K50 DEL said:
Just bought a 5 year old X1
Looked long and hard at leasing but given I do 25k a year the numbers just didn't add up - I also didn't like the idea of being committed to that expenditure for 3 years, at least buying in cash if anything happens I can sell the car and realise some money.
A PCP deal on the right car will give you the same flexibility, it's a finance product not a contract hire so at any point you can sell the car and pay off the loan. There's also voluntary termination built in to protect the consumer. If being tied in isn't such a problem, some lease cars have seriously low excess mileage charges to cover your 25k.Looked long and hard at leasing but given I do 25k a year the numbers just didn't add up - I also didn't like the idea of being committed to that expenditure for 3 years, at least buying in cash if anything happens I can sell the car and realise some money.
Buying a 5 year old car and putting 25k pa on it, how long do you think you'll go before there's a bill and some time off the road? Will losing your mobility for a few days affect your income?
Just food for thought really, as I state above I will look at all of the options depending on my situation and requirements at the time. Fixed cost hassle free motoring is certainly one of the appeals of leasing though.
CABC said:
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.
if you could adjust/rig your market so that as many customers as possible were pushed into or willingly adopted highly lucrative finance packages that allowed for massive increases in upselling and also tied them into high purchase turnover then wouldn't you be silly to offer a price for cash that was more competitive to the customer? People who tend to buy a car conventionally tend not to go silly on options and extras as they are looking at the true price rather than the tiny monthly, or even now, weekly cost that is so tiny that you'd be a fool not to have it. And in addition, they tend not to naturally turn over cars every year or so.
Lease deals can work brilliantly for the savvy buyer who is product specific on the financing element rather than the car element but lease deals exist because the majority are just mugs who shop for the shiney shiney like a girl. But thanks to how easily the majority are manipulated into finance traps the lenders are happy to leave gaping holes for the savvy to take advantage of.
Buster73 said:
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.If you look at the standard spec on the majority of modern cars, especially in the 'prestige' sector, it is actually very strong. Leather, heated seats, sat nav, decent stereo, Bluetooth etc. There will always be a lot of frivolous boxes to tick as that's where manufacturers really make their margins but at the end of the day how man of them are genuinely something that couldn't easily be lived without? Sunroof? Memory seats? Multi coloured interior lighting? Reversing cameras? I'll take them if standard fit but if not, never mind?
Satnav is the one that always gets me. £2k for a satnav thats out of date by the time you come to sell it, is less functional than the app on your phone, and is worth hardly anything extra when you sell the car on.
Options are a con in may cases. Its often better to go up the range to get the options (where they're fitted standard in many cases) rather than spec them (by up the range I mean next class up not next model up in the same class).
Options are a con in may cases. Its often better to go up the range to get the options (where they're fitted standard in many cases) rather than spec them (by up the range I mean next class up not next model up in the same class).
Im amazed so many people are happy to spend £300 per month on a car period.
If you must have a new car then I can see how leasing can make sense.
Buying a new car outright is almost just as absurd as leasing.
Still carry on. I wouldn't mind waiting for a £5k 2016 RX450H, X5M or F Pace (8 to 10 yrs perhaps).
If you must have a new car then I can see how leasing can make sense.
Buying a new car outright is almost just as absurd as leasing.
Still carry on. I wouldn't mind waiting for a £5k 2016 RX450H, X5M or F Pace (8 to 10 yrs perhaps).
Edited by Audemars on Monday 3rd October 10:37
lostkiwi said:
Audemars said:
Im amazed so many people are happy to spend £300 per month on a car period.
If you must have a new car then I can see how leasing can make sense.
Buying a new car outright is almost just as absurd as leasing.
Agreed. If you must have a new car then I can see how leasing can make sense.
Buying a new car outright is almost just as absurd as leasing.
DonkeyApple said:
But once someone has paid down their mortgage each month and made their pension contribution, topped up their ISAs, paid school fees etc then I think people are entitled to throw a bit of the excess cash at a shiney new car and someone that smart would be using a lease because that particular deal was much cheaper than actually just buying the car.
Fine, but UK average salary is £30k ish. A £100k salary wouldn't support throwing away £300per month (after paying the things you mentioned) on something that can be acquired for a lot less. Edited by Audemars on Monday 3rd October 10:36
DonkeyApple said:
lostkiwi said:
Audemars said:
Im amazed so many people are happy to spend £300 per month on a car period.
If you must have a new car then I can see how leasing can make sense.
Buying a new car outright is almost just as absurd as leasing.
Agreed. If you must have a new car then I can see how leasing can make sense.
Buying a new car outright is almost just as absurd as leasing.
Doesn't make it sensible but its their money!
lostkiwi said:
DonkeyApple said:
lostkiwi said:
Audemars said:
Im amazed so many people are happy to spend £300 per month on a car period.
If you must have a new car then I can see how leasing can make sense.
Buying a new car outright is almost just as absurd as leasing.
Agreed. If you must have a new car then I can see how leasing can make sense.
Buying a new car outright is almost just as absurd as leasing.
Doesn't make it sensible but its their money!
Audemars said:
DonkeyApple said:
But once someone has paid down their mortgage each month and made their pension contribution, topped up their ISAs, paid school fees etc then I think people are entitled to throw a bit of the excess cash at a shiney new car and someone that smart would be using a lease because that particular deal was much cheaper than actually just buying the car.
Fine, but UK average salary is £30k ish. A £100k salary wouldn't support throwing away £300per month (after paying the things you mentioned) on something that can be acquired for a lot less. Edited by Audemars on Monday 3rd October 10:36
Bought mine from new on PCP. Only 5 payments left.. Its almost 3 years old, still has 4+years warranty left so I fully intend to keep it and run it into the ground. It'll easily do 10 years, hopefully a lot more. Really looking forward to no monthly car payments once my last 5 monthlies are done and dusted.
Ozzie Osmond said:
IMO the way to keep overall motoring costs down while enjoying a new car from to time is to buy new for cash and then keep the car a long time - so you benefit from the reduced depreciation in later years.
This way you can have a "nice" car for the same overall cost as having an "ordinary" car and replacing it every 2 or 3 years, whether bought or leased.
The ruinous bit is the initial depreciation, so if you keep it long enough you can pretend that it only cost you x/10 per year when in fact you spent half of that just to own it for the first couple of years.This way you can have a "nice" car for the same overall cost as having an "ordinary" car and replacing it every 2 or 3 years, whether bought or leased.
DuraAce said:
Bought mine from new on PCP. Only 5 payments left.. Its almost 3 years old, still has 4+years warranty left so I fully intend to keep it and run it into the ground. It'll easily do 10 years, hopefully a lot more. Really looking forward to no monthly car payments once my last 5 monthlies are done and dusted.
If it's PCP you will have a "Balloon" payment to own the car at the end, otherwise it's going back! Check your documentation, but what you describe sounds more like HP (hire purchase). Hopefully you have read the small print.Audemars said:
Fine, but UK average salary is £30k ish. A £100k salary wouldn't support throwing away £300per month (after paying the things you mentioned) on something that can be acquired for a lot less.
I feel like we've been here before and didn't get an explanation last time so let's try again.Edited by Audemars on Monday 3rd October 10:36
Please explain how a £100K a year can't support £300 per month for a brand new, factory warrantied, lastest tech, completely hassle free vehicle ever 2-3 years?
Can be acquired for a lot less? I'm assuming you mean buying at 3-5 years old instead? Well that's far from the same ownership experience and having done so myself over the years I can confirm that when all things are considered it's not that financially prudent either.
Not everything in life can be judged purely on financial cost anyway, the lack of hassle + worry and the experience of driving a new car is difficult to put a price on. At the end of the day what do people work hard for if not to enjoy the fruits of their labours, and on £100K a year, £3.5k is hardly going to put a dent in anyone's ability to plan for the future.
benjijames28 said:
Recently got a 8 year old Audi, brand new cost someone over 20 grand, I paid 6.5k and if I keep it a good few years I doubt I will lose much.
Having run a few older Audis I hope you have a large budget for maintenance.This is one of the key factors. Servicing and maintenance on older cars is going to be significantly more than for a new car.
rsbmw said:
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.
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