Leasing vs. finance vs. outright...
Discussion
Evening all
I'm keen to get people's perspective, especially regarding leasing. We've been looking at a number of small ish 4x4's today, all of which are quite pricey and will inevitably depreciate a fair amount.
Take a (not so) Mini Countryman, 30k to buy new, 7.5k deposit, leaving 22.5k to fund. Now say we keep the car 3 yrs, glasses predict 50% depreciation so we'll loose 5k per yr.
Alternatively for a little over 350 per month we could lease the same car, totalling £4200 per yr, a saving of 800 quid....£2400 total and no car to worry about selling at the end?!
Granted we loose having an 'asset' but she (the wife) does 8k miles per yr and likes to change cars every 2 or so, where is the downside to this equation?
Cheers
chris
I'm keen to get people's perspective, especially regarding leasing. We've been looking at a number of small ish 4x4's today, all of which are quite pricey and will inevitably depreciate a fair amount.
Take a (not so) Mini Countryman, 30k to buy new, 7.5k deposit, leaving 22.5k to fund. Now say we keep the car 3 yrs, glasses predict 50% depreciation so we'll loose 5k per yr.
Alternatively for a little over 350 per month we could lease the same car, totalling £4200 per yr, a saving of 800 quid....£2400 total and no car to worry about selling at the end?!
Granted we loose having an 'asset' but she (the wife) does 8k miles per yr and likes to change cars every 2 or so, where is the downside to this equation?
Cheers
chris
When you lease, you pay the leasing companies expected depreciation over the term of the lease + a profit margin for the lease company.
Whilst its possible, its unlikely that owning the same car privately will cost more unless the lease company is acheiving monumental discounts, which on a Countryman they probably wont be.
Whilst its possible, its unlikely that owning the same car privately will cost more unless the lease company is acheiving monumental discounts, which on a Countryman they probably wont be.
Oh absolutely I appreciate they have to make their profit, however we lost nearly 5k on a supposedly 'depreciation proof' nearly new Cooper S in a little under 12 months, and it proved hugely difficult to sell at all, so suddenly this looks more appealing.
Given our low annual milage and relatively short ownership plans, do people think leasing could be the best option? Please recommend better solutions if you know of them! (or recommend leasing firms if you have had a good experience)
Any experiences good and bad would be much appreciated!
Given our low annual milage and relatively short ownership plans, do people think leasing could be the best option? Please recommend better solutions if you know of them! (or recommend leasing firms if you have had a good experience)
Any experiences good and bad would be much appreciated!
1878 said:
Where's the popcorn icon when you need it?
I was about to say...this is a hugely contentious topic on PH! Let battle commence...If you can get wifey to prefer swapping cars every 2 years over owning the car then it sounds like leasing is the one for you..No hard and fast answer - all depends on personal circumstances and prefs
Chr1sch said:
where is the downside to this equation?
Chr1sch said:
Now say we keep the car 3 yrs...
Alternatively for a little over 350 per month we could lease the same car, totalling £4200 per yr, a saving of 800 quid....£2400 total...
Errr.... Alternatively for a little over 350 per month we could lease the same car, totalling £4200 per yr, a saving of 800 quid....£2400 total...
ETA
Oh wait you mean the saving (3 x 800...), nevermind...
Edited by MarkRSi on Sunday 23 October 12:55
Papyrus said:
I'm a firm believer in buying everything outright.
Ofcourse a few exceptions, but cars, plain outright. If you can't buy it outright, you can't afford, I say again, AFFORD it.
I believe that people that day things like that are trolling Ofcourse a few exceptions, but cars, plain outright. If you can't buy it outright, you can't afford, I say again, AFFORD it.
s who should stop sticking their nose into the financial arrangements of other people. Papyrus said:
I'm a firm believer in buying everything outright.
Ofcourse a few exceptions, but cars, plain outright. If you can't buy it outright, you can't afford, I say again, AFFORD it.
I like that. You believe in something, so therefore think that every other bugger's finances work in conjunction with your beliefs.Ofcourse a few exceptions, but cars, plain outright. If you can't buy it outright, you can't afford, I say again, AFFORD it.
That's not how it works, however many capital letters you use.
Lots of people could buy their cars outright, but choose to invest cash in other areas that may actually be worthwhile.
You can smugly piss money down the toilet all day long on depreciation, while ignorantly lecturing others, but at the end of the day there's every chance that they're the ones saving money.
Especially if they have no intention of keeping the car in the first place.
And for what it's worth, I did actually pay cash for my car. But then again, it's not a depreciating asset, and I intend to keep it irrespective of values.
Sometimes there are special offers, underwritten by the manufacturer, that make one option or another more attractive than normal.
One i noticed recently is merc m class 350 grand edition. 51750 otr. Not sure what you would actually pay to buy one, but a 30k 3+35 personal lease is available for 19900 which looks worthy of investigation for someone considering that vehicle
I'd say it makes sense to consider all options on all cars, but to but to always remember that most cars depreciate and that manufacturers, dealerships, financiers and all other parties to the deal except you, are aiming to profit from the transaction
One i noticed recently is merc m class 350 grand edition. 51750 otr. Not sure what you would actually pay to buy one, but a 30k 3+35 personal lease is available for 19900 which looks worthy of investigation for someone considering that vehicle
I'd say it makes sense to consider all options on all cars, but to but to always remember that most cars depreciate and that manufacturers, dealerships, financiers and all other parties to the deal except you, are aiming to profit from the transaction
I have a couple of mates who are car dealers( proper ones,premises etc).
Last few cars they have had for personal use have been leased.
One in particular is no mug and makes a good living so I'm guessing that some of the better deals must make a lot of sense.
I remember him having a Civic type R for his missus a couple of years back when they were available for around £200/ month.
As someone said above there are good deals to be had from time to time.
Evo mag mentioned good deals on the VW Scirroco at the mo.
Last few cars they have had for personal use have been leased.
One in particular is no mug and makes a good living so I'm guessing that some of the better deals must make a lot of sense.
I remember him having a Civic type R for his missus a couple of years back when they were available for around £200/ month.
As someone said above there are good deals to be had from time to time.
Evo mag mentioned good deals on the VW Scirroco at the mo.
A car is a car unless you pay for it cash and are mortgage free it is being financed in one way or another ie you could pay off your mortgage earlier.
If you only ever buy brand new cars and never keep them begone 2-3 years then you need to simply calculate what is the cheapest option. Sometimes lease companies have deals on which are incredible that individuals cannot match buying in any other way so keep an eye out for these.
Your own example has shown you it's £2,400 cheaper plus no hassle selling it that's 2,400 reasons why that option is better.
However £30k on a MINI clubman.... Your crazy. You could have a 520d/528i for that money!!!
If you only ever buy brand new cars and never keep them begone 2-3 years then you need to simply calculate what is the cheapest option. Sometimes lease companies have deals on which are incredible that individuals cannot match buying in any other way so keep an eye out for these.
Your own example has shown you it's £2,400 cheaper plus no hassle selling it that's 2,400 reasons why that option is better.
However £30k on a MINI clubman.... Your crazy. You could have a 520d/528i for that money!!!
Haha morning! Love the Ph massiv when it gets moving....
So first things first, this is NOT about affordability, fundamentally we could buy it outright but having been burnt on cars already (and having far more important house and baby shaped investments to fund) I'm really struggling to see how we would be worse off?
To be honest I doubt we would ever buy outright again based on recent experience, why have all our savings tied up in a depreciating asset? God forbid if we bought a car which didn't hold it's value as well as a mini
In the case of the countryman, swmbo is a hard one to please and it's not quite 30k...
So first things first, this is NOT about affordability, fundamentally we could buy it outright but having been burnt on cars already (and having far more important house and baby shaped investments to fund) I'm really struggling to see how we would be worse off?
To be honest I doubt we would ever buy outright again based on recent experience, why have all our savings tied up in a depreciating asset? God forbid if we bought a car which didn't hold it's value as well as a mini
In the case of the countryman, swmbo is a hard one to please and it's not quite 30k...
Depreciation always ends up being more than you expect in my experience. There are some advantages to having it a known quantity.
Having said that, both our cars are paid up as i am one of those people who doesnt like being in debt, whether or not it's the best way in purely financial terms.
Having said that, both our cars are paid up as i am one of those people who doesnt like being in debt, whether or not it's the best way in purely financial terms.
One thing I know is common place in dealerships is this, there is a small area on the salespersons computer screen that, if they think the customer is a "done deal" they can press. It's not marked, so can't be seen but will increase your % payment on what ever deal that's been offered. Be careful out there!!!!
There is an addige
If it depreciates lease it, if it appreciates it.
Personally I have only ever lost money owning newer cars. If I can limit or fix that cost I'm a happy bunny.
The risk element is extracting yourself if income falls.
Now left newer cars behind, and am running an 02 Volvo purchased outright so not quite by my rules. Having said that the car cost £1,100 so loss is limited to far less that the £6k merc that I am trying to sell.
If it depreciates lease it, if it appreciates it.
Personally I have only ever lost money owning newer cars. If I can limit or fix that cost I'm a happy bunny.
The risk element is extracting yourself if income falls.
Now left newer cars behind, and am running an 02 Volvo purchased outright so not quite by my rules. Having said that the car cost £1,100 so loss is limited to far less that the £6k merc that I am trying to sell.
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