Car for work - lease or buy?
Discussion
I'm in the process of getting a car for work (boring, A3, Golf, 3 series etc), and am confronted with the option of leasing or buying outright (second hand).
I'm of the opinion that forking out each month to lease can never be better value than buying straight, with the exception of not tying up as much capital, but I'd be interested to see what the consensus was. Mileage will be paid as will insurance in both eventualities.
I'm of the opinion that forking out each month to lease can never be better value than buying straight, with the exception of not tying up as much capital, but I'd be interested to see what the consensus was. Mileage will be paid as will insurance in both eventualities.
Are you on a company car scheme and thus bound to certain conditions - especially age of vehicle?
A wild guess would suggest buying secondhand and then banking the mileage payments to cover repairs / replacement when the time comes. Also are you going to have a predictable mileage over several years? If you commit to a 3 year lease and then your mileage plummets then you've still got the bills to pay just to keep it on your driveway.
Outright ownership (even with a bank loan) would surely be the most flexible option.
A wild guess would suggest buying secondhand and then banking the mileage payments to cover repairs / replacement when the time comes. Also are you going to have a predictable mileage over several years? If you commit to a 3 year lease and then your mileage plummets then you've still got the bills to pay just to keep it on your driveway.
Outright ownership (even with a bank loan) would surely be the most flexible option.
It's impossible to tell you what is the best option when we don't have figures for each option. One of the main problems with people talking about finances in general is that most people will advise to never use x or always use y. The shrewd person would keep an open mind and take on the one which provides the best options. I lease my current car and it works out cheaper, despite the numerous threads on here telling me it can't.
Work out all the figures, benefits and drawbacks and then decide. There is no single answer.
Work out all the figures, benefits and drawbacks and then decide. There is no single answer.
The cheap lease deals can work out well if you're not that fussy about exactly what you have. They tend to be for stuff in stock that manufacturers want to get rid of - either oversupply or minor tweaks made to a model's engine/spec making them not "current" any more. If you just want a 5 door diesel hatch over 2 or 3 years, know the mileage you'll do (excess mileage hurts on most lease deals, and they're usually for 10kpa), and want a fixed cost then it can work well. No MOTs, probably one service and set of tyres in the time you have it, tax disc arrives in the post. Pay every month, at the end hand it back.
Personally I bought a 6-month-old ex-dealer car for work use, got a decent saving on new, I can't predict my mileage well enough for lease, and I'm planning to keep it 4 years or so but I want the flexibility to just change it if I wanted to. Even if I traded it in at the end, it should have cost less to own and run than the equivalent lease (which is cash that goes towards the costs of my bike!). I'll probably do the same again next time.
Personally I bought a 6-month-old ex-dealer car for work use, got a decent saving on new, I can't predict my mileage well enough for lease, and I'm planning to keep it 4 years or so but I want the flexibility to just change it if I wanted to. Even if I traded it in at the end, it should have cost less to own and run than the equivalent lease (which is cash that goes towards the costs of my bike!). I'll probably do the same again next time.
va1o said:
Lease is probably easiest for that sort of car
Yep, generally, it seems that leasing is best to drive a new, mainstream, cheapish car for a defined term and mileage with almost total certainty on cost. If you want something fun its generally better to buy it yourself though.
Depends on requirements. My a4 was initially bought with a max of 20k a year in mileage in mind.
However ended up doing up to 60k a year. At present it costs me around 5p a mile according to the ph estimator. Cheap as chips.
Has just passed its mot again at 338k miles with only two issues one being a numberplate light and the other being a headlight needing replacing. Total bill 220 quid i think.
Were i to have to choose between a lease or purchase i would seriously consider purchase as the better option offsetting the cost with expenses from the company.
If you think you could offset the running costs inc depreciation with expenses it seems the better option providing you have surplus from the company car scheme meaning you are making money rather than losing.
However ended up doing up to 60k a year. At present it costs me around 5p a mile according to the ph estimator. Cheap as chips.
Has just passed its mot again at 338k miles with only two issues one being a numberplate light and the other being a headlight needing replacing. Total bill 220 quid i think.
Were i to have to choose between a lease or purchase i would seriously consider purchase as the better option offsetting the cost with expenses from the company.
If you think you could offset the running costs inc depreciation with expenses it seems the better option providing you have surplus from the company car scheme meaning you are making money rather than losing.
Edited by Tallbut Buxomly on Thursday 21st July 18:38
You need to assess what is the cost of a company car over leasing it yourself.
Yes you will need to select the most tax efficient ones possible. Fully insured maintained if you leave or they make you redundant hand the car back.
Does make a lot of sense - milage dependant plus the strict rules ie no older than 5 years... So that means if you keep cars three years you at the oldest have to buy a two year old car. The maths struggle really.
Now I did just this took the cash and went for my own car much higher spec etc etc
Yes you will need to select the most tax efficient ones possible. Fully insured maintained if you leave or they make you redundant hand the car back.
Does make a lot of sense - milage dependant plus the strict rules ie no older than 5 years... So that means if you keep cars three years you at the oldest have to buy a two year old car. The maths struggle really.
Now I did just this took the cash and went for my own car much higher spec etc etc
In my experience, leasing is only more cost effective if you drive about the same miles per year as the contract allows, or considerably less. If less, then residual will be higher than the GFV. If more, then can incur high pence per mile charges at the end of the lease.
Leases are also better suited for people who want to trade in their car every 3 yrs or so, and to drive off in a new car every few years.
If you intend keeping the car for longer than the usual lease terms of 3-4 yrs, or do more miles than the average contract, then it's probably better to finance over longer.
Ultimately, as others have already said, you need to look at the figures for the same car based on a lease and a hire purchase and then decide which suits your circumastances and intentions the best.
Leases are also better suited for people who want to trade in their car every 3 yrs or so, and to drive off in a new car every few years.
If you intend keeping the car for longer than the usual lease terms of 3-4 yrs, or do more miles than the average contract, then it's probably better to finance over longer.
Ultimately, as others have already said, you need to look at the figures for the same car based on a lease and a hire purchase and then decide which suits your circumastances and intentions the best.
Auburn852 said:
In my experience, leasing is only more cost effective if you drive about the same miles per year as the contract allows, or considerably less. If less, then residual will be higher than the GFV. If more, then can incur high pence per mile charges at the end of the lease.
Leases are also better suited for people who want to trade in their car every 3 yrs or so, and to drive off in a new car every few years.
If you intend keeping the car for longer than the usual lease terms of 3-4 yrs, or do more miles than the average contract, then it's probably better to finance over longer.
Ultimately, as others have already said, you need to look at the figures for the same car based on a lease and a hire purchase and then decide which suits your circumastances and intentions the best.
Most co car schemes with opt out have rules about max age of car and that being five years old. Therefore you are changing it often(or giving it to the wife) if you like it or not. Leases are also better suited for people who want to trade in their car every 3 yrs or so, and to drive off in a new car every few years.
If you intend keeping the car for longer than the usual lease terms of 3-4 yrs, or do more miles than the average contract, then it's probably better to finance over longer.
Ultimately, as others have already said, you need to look at the figures for the same car based on a lease and a hire purchase and then decide which suits your circumastances and intentions the best.
338k and original drivers seat... Your back is taking a hammering you need a seat refresh they are service items for that sort of distance
Welshbeef said:
Most co car schemes with opt out have rules about max age of car and that being five years old. Therefore you are changing it often(or giving it to the wife) if you like it or not.
338k and original drivers seat... Your back is taking a hammering you need a seat refresh they are service items for that sort of distance
If that is referring to me..338k and original drivers seat... Your back is taking a hammering you need a seat refresh they are service items for that sort of distance
Seat is still in perfectly good nick it seems very little wear on it at all tbh.
However am having a problem with a trapped nerve at the mo in my lower back and due to start physio soon.
Maybe partly due to the seat but suspect more likely due to stupidity in my earlier years when i used to jump off very high objects and lift very heavy items with no assistance.
LeightonBuzzard said:
Lease cars get fleaced when in for a service, so your pads, discs, tyres etc will always be brand newish 
Maybe so, but the money is company from somewhere - the lease companies aren't charities!With a private purchase you can choose how often to change service items, as well as choosing to swap tyres between seasons or optimise the spend according to your own tastes. Also a parking dent is an irritation and a rant on PH rather than a bill at the end of the lease term.
In fact, looking at a 57 golf GTI tomorrow. This gives me three years of freely insurable life with my company. Based on a purchase price of c.10k, which will depreciate to 3-4k(?) over the next 3 years, yearly cost is therefore c.2k + servicing / repairs. This is cheaper than a lease, and gives me full flexibility to choose what I want etc. I attach zero benefit to having a 'new' car currently..
Is this stupid?!
Is this stupid?!
AJRH said:
In fact, looking at a 57 golf GTI tomorrow. This gives me three years of freely insurable life with my company. Based on a purchase price of c.10k, which will depreciate to 3-4k(?) over the next 3 years, yearly cost is therefore c.2k + servicing / repairs. This is cheaper than a lease, and gives me full flexibility to choose what I want etc. I attach zero benefit to having a 'new' car currently..
Is this stupid?!
Sounds entirely sensible to me. Much more flexibility than a lease - if you change your mind next year you can trade it for something else without fear of penalty clauses etc.Is this stupid?!
AJRH said:
In fact, looking at a 57 golf GTI tomorrow. This gives me three years of freely insurable life with my company. Based on a purchase price of c.10k, which will depreciate to 3-4k(?) over the next 3 years, yearly cost is therefore c.2k + servicing / repairs. This is cheaper than a lease, and gives me full flexibility to choose what I want etc. I attach zero benefit to having a 'new' car currently..
Is this stupid?!
Depends on your prioritites. If you had the choice of company car them something like a 320d @ 40% tax would cost circa £1400 per year in BIK. Plus you don't have to worry about running costs. Is this stupid?!
I am going through a similar thought process and have a company car at the moment. To change jobs and maintain the status quo with no company car provided but getting a personal lease I estimate a £12k pay increase is needed.
AJRH said:
In fact, looking at a 57 golf GTI tomorrow. This gives me three years of freely insurable life with my company. Based on a purchase price of c.10k, which will depreciate to 3-4k(?) over the next 3 years, yearly cost is therefore c.2k + servicing / repairs. This is cheaper than a lease, and gives me full flexibility to choose what I want etc. I attach zero benefit to having a 'new' car currently..
Is this stupid?!
Plus insurance plus MOT.Is this stupid?!
A Golf Blue motion is £998p.a. which includes all servicing tyres, roadside recovery, insurance and hirecar. Plus the tax disc.
They sort out the car collection and return when its being serviced & if you have an accident (be it you or 3rd party at fault) they fully sort out the issue not you calling up ins co's dealing with it.
Sure you will not get a Golf GTI on the list but its 100% known cost for the car. Plus you park it anywhere no worries if its stolen etc.
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