Leasing ALWAYS makes sense...
Discussion
As a kid I always used to wonder what car I’d own when I was older: not what car I’d drive, but what car I’d own. Maybe it’s because of that which was instilled in me at a young age, maybe it’s because I want to see the cars on my driveway as assets rather than liabilities and to enjoy maintaining and caring for them as such, but to me leasing only makes sense to me as a way for people to drive a car that they wouldn’t otherwise be able to afford. I’m not saying that anyone who chooses to lease rather than own is wrong to do so but the bottom line is that I’m not personally prepared to pay someone else for the privilege of borrowing a car that they own, and on their terms.
Leasing works very well for my wifes car, a Fabia Monte Carlo, it costs us way less to lease over 3 years than it would to buy, run and re-sell the same car over the same period, as she does so little mileage.
I run a 320d-msport and do about 20k miles a year, I cant find a personal lease deal that's better than buying re-selling the same car so financially leasing wouldnt work for me, particularly if i then look a a 2 year old one and do the same sums, however that isnt quite comparing apples with apples but its a good option.
So really, leasing works well for some people, less well for others, in pure financial terms.
The emotive side of the decision is a whole different kettle of fish, my dad likes to own his cars and has an Octavia VRS estate, he swaps this for another new one every 2 years or so and loses a fortune compared to if he leased....however nothing will change his mind as he likes to own it, although there is no physical difference.
What price peace of mind and happiness eh?
I run a 320d-msport and do about 20k miles a year, I cant find a personal lease deal that's better than buying re-selling the same car so financially leasing wouldnt work for me, particularly if i then look a a 2 year old one and do the same sums, however that isnt quite comparing apples with apples but its a good option.
So really, leasing works well for some people, less well for others, in pure financial terms.
The emotive side of the decision is a whole different kettle of fish, my dad likes to own his cars and has an Octavia VRS estate, he swaps this for another new one every 2 years or so and loses a fortune compared to if he leased....however nothing will change his mind as he likes to own it, although there is no physical difference.
What price peace of mind and happiness eh?
iphonedyou said:
yonex said:
You're a bit naive I feel? I know plenty of people who drive things not as grand as your Golf or Audi who have enough money to buy pretty much anything 
.
Careful, yonex. Dangerously close to the old 'wealth whispers' trope, there..bqf said:
I have a 13 year old audi allroad. Does this say to people 'I'm struggling'??
Blimey. i'd best get down the audi dealer quick and sign up to spunk £10,000 on a car i will never own
But for the money you would end up with the use of a brand new car, with the all the latest in-car, safety and engine tech, a full manufacturers warranty and no surprise bills for the duration of the agreement (3 years?).Blimey. i'd best get down the audi dealer quick and sign up to spunk £10,000 on a car i will never own
I fully understand it's not for everyone but there are obviously significant benefits to running a new car against a 13 year old example, especially if a lack of hassle and ultimate reliability are priorities.
The wifes last 3 cars have all been leased for exactly those reasons, and the decision to do so has nothing to do with other peoples opinions.
This is one of my favourite articles on the "run a banger or buy/lease a new car" debate.
http://www.thetruthaboutcars.com/2015/02/no-fixed-...
It's quite long, but worth reading. I agree with the overall sentiment of the article:
http://www.thetruthaboutcars.com/2015/02/no-fixed-...
It's quite long, but worth reading. I agree with the overall sentiment of the article:
article said:
For many families, a new-car payment is a burden — but it’s one they can predict and live with. It sucks to “throw away” $300 or $400 every month, but it’s never a surprise and in exchange they have freedom from surprises. They have freedom from the surprise of losing two d ays of work or being stuck with their children by the side of a fifteen-degree freeway all night or having to diagnose mechanical issues using a cellphone flash and whatever conventional wisdom their parents bothered to impart wheni they weren’t off doing their own thing. They know that every month they are exchanging a fixed sum of money for certainty and reliability
I've always looked at leasing as one of those things you do if you're prepared to throw that money away. I mean don't mean it's the same as burning £300 a month I mean it has to be completely disposable.
Now some people will see an amount of money going out as month and think it's reasonable enough to own whatever car they choose. i don't entirely disagree with that but in my mind I always look at it and go, "What if I'm ever in a position to not be able to afford X amount a month?". Then essentially I'm left with nothing for my money. I've seen people do this and go from driving a £25k nearly/new car, a change in finances has meant they can't afford the payments and they have nothing to put down on another car and end up in an old banger.
I don't object to buying a car new, I've done so on a few occasions but I've always gone for an HP deal and owned it at the end. With a healthy deposit down, I've been able to pay the car off and after 3 years own it. Worse case is that if I had to, could sell the car, pay off the loan take the remaining money and buy something reasonable.
If I was in a position to pay a PCP deal and drive a decent car, whilst still owning my CLS63 I'd do that. I can see the hassle free nature of it but I'd always know I had an asset. Otherwise it's not for me.
Now some people will see an amount of money going out as month and think it's reasonable enough to own whatever car they choose. i don't entirely disagree with that but in my mind I always look at it and go, "What if I'm ever in a position to not be able to afford X amount a month?". Then essentially I'm left with nothing for my money. I've seen people do this and go from driving a £25k nearly/new car, a change in finances has meant they can't afford the payments and they have nothing to put down on another car and end up in an old banger.
I don't object to buying a car new, I've done so on a few occasions but I've always gone for an HP deal and owned it at the end. With a healthy deposit down, I've been able to pay the car off and after 3 years own it. Worse case is that if I had to, could sell the car, pay off the loan take the remaining money and buy something reasonable.
If I was in a position to pay a PCP deal and drive a decent car, whilst still owning my CLS63 I'd do that. I can see the hassle free nature of it but I'd always know I had an asset. Otherwise it's not for me.
chrisb92 said:
These threads always make me smile..
Someone posts saying that have loads of money, but drive around in a 10-15 year old pile of s
t, because they don't care what people think. There's another word for these people.. bullstters!
It would be slightly easier to believe if you weren't posting on a motoring forum!!
I don't have loads of money let alone go around even intimating it, but do I have nice cars for 'special' use and drive around in what many consider a to be a complete shed. FWIW I think personal cars are better owned outright. Others don't. I believe the current lease prices to be unsustainable but at the moment the lessees are getting some great deals.Someone posts saying that have loads of money, but drive around in a 10-15 year old pile of s
t, because they don't care what people think. There's another word for these people.. bullstters!It would be slightly easier to believe if you weren't posting on a motoring forum!!
article said:
For many families, a new-car payment is a burden — but it’s one they can predict and live with. It sucks to “throw away” $300 or $400 every month, but it’s never a surprise and in exchange they have freedom from surprises. They have freedom from the surprise of losing two d ays of work or being stuck with their children by the side of a fifteen-degree freeway all night or having to diagnose mechanical issues using a cellphone flash and whatever conventional wisdom their parents bothered to impart wheni they weren’t off doing their own thing. They know that every month they are exchanging a fixed sum of money for certainty and reliability
The assumption is that used cars are likely to break down and new ones certain not to. The fact is that even 10 year old cars rarely 'fail to proceed' these days. Any minor issue can normally be left until it's convenient or coincides with a scheduled service. And of course brand new cars can fail as well. If the notion of possibly, if unlucky, having to diagnose issues by the light of a cellphone flash really worries you that much then join a breakdown service, or buy a torch.
Edited by Dr Jekyll on Friday 20th January 15:56
Not many mentions so far about the impact of options on leasing costs which surprises me. Every time I look at leasing I come away disappointed because as soon as I go and add a few options to a typical german saloon it eliminates any financial benefit from it being a lease. One could argue this is the case on PCP too, but at least there you can buy the car if you want and continue to benefit from the options you yourself selected.
In years to come 2nd hand car buyers are going to be lamenting the poor specification of certain cars (Golf R springs to mind) because so many of them were leased and people ordered them in boggo spec. I get why people do this, it's cheaper clearly, but if I am going to drive a nice new car (to impress the neighbours etc, etc..) it feels a bit hollow if it doesn't have a few options to lift the experience a bit.
In years to come 2nd hand car buyers are going to be lamenting the poor specification of certain cars (Golf R springs to mind) because so many of them were leased and people ordered them in boggo spec. I get why people do this, it's cheaper clearly, but if I am going to drive a nice new car (to impress the neighbours etc, etc..) it feels a bit hollow if it doesn't have a few options to lift the experience a bit.
I see a lot of people on here saying leasing doesnt work for them because they can run an old snotter for the same xxx months as the lease for a cheaper cost.
That's not saying you don't like leasing, thats saying you wouldn't run a new car as you dont want to suffer depreciation.
Leasing is only comparable with owning if you are comparing the exact same car on a lease vs own basis.
Most of the reasons I see on this thread have either forgotton depreciation exists or are complaining they couldn't 'waste' the money on a new car. Neither are reasons for not leasing, these are reasons for not buying new.
That's not saying you don't like leasing, thats saying you wouldn't run a new car as you dont want to suffer depreciation.
Leasing is only comparable with owning if you are comparing the exact same car on a lease vs own basis.
Most of the reasons I see on this thread have either forgotton depreciation exists or are complaining they couldn't 'waste' the money on a new car. Neither are reasons for not leasing, these are reasons for not buying new.
James_G said:
Not many mentions so far about the impact of options on leasing costs which surprises me. Every time I look at leasing I come away disappointed because as soon as I go and add a few options to a typical german saloon it eliminates any financial benefit from it being a lease. One could argue this is the case on PCP too, but at least there you can buy the car if you want and continue to benefit from the options you yourself selected.
In years to come 2nd hand car buyers are going to be lamenting the poor specification of certain cars (Golf R springs to mind) because so many of them were leased and people ordered them in boggo spec. I get why people do this, it's cheaper clearly, but if I am going to drive a nice new car (to impress the neighbours etc, etc..) it feels a bit hollow if it doesn't have a few options to lift the experience a bit.
You're right, but then there aren't many well-priced used cars with options, either - except possibly BMW approved used (which aren't exactly cheap!). If you don't like the spec, the answer is to keep looking and get something else which comes with the spec as standard. Even with cash, most options lose far more of their value proportionally than the car with the better spec from the outset will lose, though as ever, there are exceptions.In years to come 2nd hand car buyers are going to be lamenting the poor specification of certain cars (Golf R springs to mind) because so many of them were leased and people ordered them in boggo spec. I get why people do this, it's cheaper clearly, but if I am going to drive a nice new car (to impress the neighbours etc, etc..) it feels a bit hollow if it doesn't have a few options to lift the experience a bit.
Dr Jekyll said:
The assumption is that used cars are likely to brake down and new ones certain not to. The fact is that even 10 year old cars rarely 'fail to proceed' these days. Any minor issue can normally be left until it's convenient or coincides with a scheduled service. And of course brand new cars can fail as well.
If the notion of possibly, if unlucky, having to diagnose issues by the light of a cellphone flash really worries you that much then join a breakdown service, or buy a torch.
I have a 4 year old Honda and a 16 year old Jag in my household. Neither has ever failed to proceed, but I have spent significantly more of my free time on the Jag sourcing random minor interior trim parts from breakers yards, diagnosing and researching the random fault codes it sometimes throws up, and faffing around with battery conditioners to keep the battery in a good state when the car is left unused for more than a week. I don't mind doing this stuff, but some people just can't be arsed with it, and that's why they pay more to drive a newer car. If the notion of possibly, if unlucky, having to diagnose issues by the light of a cellphone flash really worries you that much then join a breakdown service, or buy a torch.
The point of the article I linked to was that one man's "interesting tinkering" is another's "unnecessary hassle". Not everyone has the time or inclination or knowledge to do all that stuff.
havoc said:
Leasing makes sense if you only compare over the lifetime the lease-provider wants you to (typically 2 years from new).
If you typically own a car for 3+ yrs, particularly 4 or more, then leasing often makes no sense whatsoever (barring the odd "too good to refuse" deal).
Spot on. And do you know why ? Because the lease pricing is massively yield managed - in other words it doesn't matter if 90% of lease deals are poor compared to depreciation on a new discounted car bought with cash if 10% of the lease deals are better. And do you know what ? They are. Some deals are so low that they are also better than running the same car bought cash at 2 years old when all parameters are accounted for (repairs, warranty, tax, servicing, consumables, etc etc).If you typically own a car for 3+ yrs, particularly 4 or more, then leasing often makes no sense whatsoever (barring the odd "too good to refuse" deal).
I have zero preconceptions about how I finance my family cars but atm 24 month deals are still the cheapest (but only when carefully chosen).
Asa that stops I'll buy again, maybe new, maybe second hand.
Edited by nickfrog on Friday 20th January 16:04
M-SportMatt said:
I see a lot of people on here saying leasing doesnt work for them because they can run an old snotter for the same xxx months as the lease for a cheaper cost.
That's not saying you don't like leasing, thats saying you wouldn't run a new car as you dont want to suffer depreciation.
Leasing is only comparable with owning if you are comparing the exact same car on a lease vs own basis.
Most of the reasons I see on this thread have either forgotton depreciation exists or are complaining they couldn't 'waste' the money on a new car. Neither are reasons for not leasing, these are reasons for not buying new.
Given that leasing is generally only available for new cars, arguments against buying new are also arguments as to why leasing doesn't always make sense.That's not saying you don't like leasing, thats saying you wouldn't run a new car as you dont want to suffer depreciation.
Leasing is only comparable with owning if you are comparing the exact same car on a lease vs own basis.
Most of the reasons I see on this thread have either forgotton depreciation exists or are complaining they couldn't 'waste' the money on a new car. Neither are reasons for not leasing, these are reasons for not buying new.
James_G said:
Not many mentions so far about the impact of options on leasing costs which surprises me.
You'll pay the entire price of the option over the term because most options depreciate 100% quickly.The trick is to choose the spec that you need and have no option. Thankfully the best lease deals are on mid-spec.
"Impress the neighbours" : I assume that was tongue in cheek. ;-)
nickfrog said:
You'll pay the entire price of the option over the term because most options depreciate 100% quickly.
The trick is to choose the spec that you need and have no option. Thankfully the best lease deals are on mid-spec.
"Impress the neighbours" : I assume that was tongue in cheek. ;-)
Yes, tongue in cheekThe trick is to choose the spec that you need and have no option. Thankfully the best lease deals are on mid-spec.
"Impress the neighbours" : I assume that was tongue in cheek. ;-)
But having said that most people still go for the 19 inch wheels and dark glass in preference to things like heated seats or upgraded sound system, so perhaps many a true word said in jest!
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