You want a £50k car, why do you Lease, or Buy
Discussion
Two ends of spectrum…. Some won’t have £50k but can easily afford £800 p/m.
Some have £50k but would rather do something else with it (invest etc etc)
Deals don’t usually work out that way. I’ve been given lease deals where it barely covers the depreciation so why wouldn’t you. I’ve bought cars outright I’ve kept for much longer and everything inbetween.
Variables personal circumstances are etc
Some have £50k but would rather do something else with it (invest etc etc)
Deals don’t usually work out that way. I’ve been given lease deals where it barely covers the depreciation so why wouldn’t you. I’ve bought cars outright I’ve kept for much longer and everything inbetween.
Variables personal circumstances are etc
dibbers006 said:
Call me a moron because I can't answer my own pondering.
I cannot fathom new vehicle scenarios. Excluding the idiosyncrasies (sp?) of Hire, Purchase, Lease. Let's go bog standard average conditions.
5x years to have a car.
Buy it... £50k, sell for £25k at the end of the five years. This costs approx. £420 a month over that period.
'Lease' for the same spec, same everything equates to circa £7-800 p/m
After five years, both scenarios you walk away from, empty handed.
Why would you pay double for the privilege?
Okay, if you buy, you need to front the monies for the five years. Okay, if you lease the servicing is not your problem (but a new car warranty covers a lot of sins no?)
But all things considered, if you want a shiny new thing, why would you let the hire companies take 30%+ cut?
What am I missing? (I genuinely feel like I'm missing something)
Is the only benefit to not purchasing direct that you don't need to have a wad of cash? Surely if that is the concern, then a loan is much better value than leasing.
I think your future value is extremely optimistic for most normal cars. Lots of cars lose 50% or more in three years. Obvs it's a bit different at the moment. I cannot fathom new vehicle scenarios. Excluding the idiosyncrasies (sp?) of Hire, Purchase, Lease. Let's go bog standard average conditions.
5x years to have a car.
Buy it... £50k, sell for £25k at the end of the five years. This costs approx. £420 a month over that period.
'Lease' for the same spec, same everything equates to circa £7-800 p/m
After five years, both scenarios you walk away from, empty handed.
Why would you pay double for the privilege?
Okay, if you buy, you need to front the monies for the five years. Okay, if you lease the servicing is not your problem (but a new car warranty covers a lot of sins no?)
But all things considered, if you want a shiny new thing, why would you let the hire companies take 30%+ cut?
What am I missing? (I genuinely feel like I'm missing something)
Is the only benefit to not purchasing direct that you don't need to have a wad of cash? Surely if that is the concern, then a loan is much better value than leasing.
Excuse speelling, having a mind-fart.
dibbers006 said:
Mouse Rat said:
I lease a VW Touareg, it had a list price of £63K
It will cost £19K over 3 years to lease. The best PCP deal at the time was roughly £28K over the same period + road tax.
To me, its worth £19K over 3 years. Not nearly £30K and definitely I wouldn't spend £60K of my own money on it.
Again, that's with a change at sub five years.
That is not a comparable scenario.It will cost £19K over 3 years to lease. The best PCP deal at the time was roughly £28K over the same period + road tax.
To me, its worth £19K over 3 years. Not nearly £30K and definitely I wouldn't spend £60K of my own money on it.
Again, that's with a change at sub five years.
If you wish to chop and change, the costing is significantly different.
Canon_Fodder said:
OP Leasing these days is dead as, due to the under supply of new cars.
In the old days I once had a 32K car for £190/month.
When leasing was good is was really good
This - I have similar (£33k car for £210 a month but goes back Tuesday). Leasing is not the way at the moment unless you are prepared to literally take anything that pops up on the brokers sites as a bargain.In the old days I once had a 32K car for £190/month.
When leasing was good is was really good
OP - not sure where you would get a 5 year lease from - they are generally around 24 to 36 months. Not sure I would want to lease a car outside of warranty.
Edited by Mark V GTD on Saturday 19th February 19:58
dibbers006 said:
Mouse Rat said:
dibbers006 said:
Mouse Rat said:
I lease a VW Touareg, it had a list price of £63K
It will cost £19K over 3 years to lease. The best PCP deal at the time was roughly £28K over the same period + road tax.
To me, its worth £19K over 3 years. Not nearly £30K and definitely I wouldn't spend £60K of my own money on it.
Again, that's with a change at sub five years.
That is not a comparable scenario.It will cost £19K over 3 years to lease. The best PCP deal at the time was roughly £28K over the same period + road tax.
To me, its worth £19K over 3 years. Not nearly £30K and definitely I wouldn't spend £60K of my own money on it.
Again, that's with a change at sub five years.
If you wish to chop and change, the costing is significantly different.
I'm very much interested in the five year scenario as it seems to be beyond a cusp of the perennial changer, but sub-out of warranty issues for an initial purchase.
dibbers006 said:
Ah, okay. This is an aspect I've not considered.
What would you say is a more realistic percentage?
For some reason I can't post the link, but if you look at the Auto Express articles about fastest and slowest depreciating cars, the middle of the range looks to be something like 50% after 3 years. If you figure on that being around a third every 18 months, then after five years you're doing well if your car is still worth a third of what you paid new. Obviously too many variables to be very accurate, and the effect of those variables probably increases as cars get older, but only the very slowest depreciating (65-70% after 3 years) will still have half their value after 5, and some will be more like a quarter. What would you say is a more realistic percentage?
dibbers006 said:
What am I missing? (I genuinely feel like I'm missing something)
Work to the prices/deals available at the time you're looking to get a car.If someone will give me something for £300 a month for 3 years that I'm damn sure will depreciate by £15k in that period, I'll take a punt. If they want £400, I probably won't.
I lease a £50k car for £500 per month over 3 years
Self employed so write off the total lease cost on my tax return, so it’s now costing me £300 a month
Even if you stretch that over 5 years, in normal circumstances I would say the depreciation would be more than the lease cost
And I didn’t have to pay £50k upfront and hope the car doesn’t depreciate
Self employed so write off the total lease cost on my tax return, so it’s now costing me £300 a month
Even if you stretch that over 5 years, in normal circumstances I would say the depreciation would be more than the lease cost
And I didn’t have to pay £50k upfront and hope the car doesn’t depreciate
The rest of the cost is interest.
If you don't have £50k to buy it with then you are going to need to borrow it
a lot of PCP deals are bad because the rates can be around 10% maybe more,
if you borrow £50k over 5 years on a pcp with a GFV of £25k it will cost you around £750 a month at 10%, that is nearly double.
If you can get the rate down to 2.9% its £520 so you're then paying £100 more, that is the cost of not already being wealthy enough to buy it outright if you have a reasonable credit rating.
But on the other hand if you've got the £50k and keep it in a high street bank's stocks and shares isa you'll probably get more than 2.9%, and if you suddenly need the cash, you have it, if the used market drops and it end up worth £20k after 5 years, you can hand it back and they are down £5k not you, so even if you have the £50k but not huge amounts more pcp makes a lot of sense.
If you don't have £50k to buy it with then you are going to need to borrow it
a lot of PCP deals are bad because the rates can be around 10% maybe more,
if you borrow £50k over 5 years on a pcp with a GFV of £25k it will cost you around £750 a month at 10%, that is nearly double.
If you can get the rate down to 2.9% its £520 so you're then paying £100 more, that is the cost of not already being wealthy enough to buy it outright if you have a reasonable credit rating.
But on the other hand if you've got the £50k and keep it in a high street bank's stocks and shares isa you'll probably get more than 2.9%, and if you suddenly need the cash, you have it, if the used market drops and it end up worth £20k after 5 years, you can hand it back and they are down £5k not you, so even if you have the £50k but not huge amounts more pcp makes a lot of sense.
dibbers006 said:
I think this is the kicker isn't it.
The final value @5 years.
That's the massive badger in the room with an asterisk shaped like an elephant.
Fannying around with potential resale brings things much more in line with a lease.
That is the smoking gun I've been skirting without full comprehension.
I don't think it is that big of a factor, it's a risk that gets factored into the interest rate, but they are fairly stable. The customers on the other hand may not always be.The final value @5 years.
That's the massive badger in the room with an asterisk shaped like an elephant.
Fannying around with potential resale brings things much more in line with a lease.
That is the smoking gun I've been skirting without full comprehension.
Personally I find it fairly mind boggling that people can afford to spend £750 a month on a car, yet don't have a good enough credit rating to get the same car for £520 a month.
We paid £71k for our Model X in 2017, resale value today is £55k.
If I put it up on Autotrader for £50k it'll be the cheapest one forsale. That would work out as £320/month depreciation.
Lease/HP cost in 2017 was around £900/month depending on the deposit.
Our 7 years old Lexus IS300H was £32k in 2015 new, WBAC will pay £17k for it tomorrow. That works out as £180/month. PCP 'deal' at the time was around £400/month.
No plans to sell either car, we simply couldn't afford/justify buying/changing to brand new cars every 3-5 years.
If I put it up on Autotrader for £50k it'll be the cheapest one forsale. That would work out as £320/month depreciation.
Lease/HP cost in 2017 was around £900/month depending on the deposit.
Our 7 years old Lexus IS300H was £32k in 2015 new, WBAC will pay £17k for it tomorrow. That works out as £180/month. PCP 'deal' at the time was around £400/month.
No plans to sell either car, we simply couldn't afford/justify buying/changing to brand new cars every 3-5 years.
My example (not £50k car but shows my thinking)
BMW M140i. Was £24k BMW approved used 4 years ago 1 year old car.
Do I go PCP for £340 on a new car, or buy for £24k cash for 1 year old car? Well I hoped owning car was better financial decision that getting on PCP.
Total cost on PCP assuming no deposit: £16,320
Total cost compared to WBAC price now: £6,300
So I “saved” £10k by buying outright as opposed to a ‘cheap’ PCP deal
BMW M140i. Was £24k BMW approved used 4 years ago 1 year old car.
Do I go PCP for £340 on a new car, or buy for £24k cash for 1 year old car? Well I hoped owning car was better financial decision that getting on PCP.
Total cost on PCP assuming no deposit: £16,320
Total cost compared to WBAC price now: £6,300
So I “saved” £10k by buying outright as opposed to a ‘cheap’ PCP deal
An odd thread OP as you seem to have posted without actually looking into the numbers involved.
If we take a fairly standard £50k ish car, lets say a 530e M-Sport (£53k).
A 2018 example with 40k miles (4 year lease are as long as they run) would cost approx £26k, so a loss of £27k. To lease the same car over 4 years and 40k miles would cost £29k based on prices from Select Car Leasing
So a £2k saving if you have £53k in cash lying around and don't mind the hassle of selling the car after 4 years (which will net you less than the £26k dealer price of course). If you take PCP or HP to finance then there will be no difference in cost.
So why not lease as reduces your financial commitment to the minimum possible?
If we take a fairly standard £50k ish car, lets say a 530e M-Sport (£53k).
A 2018 example with 40k miles (4 year lease are as long as they run) would cost approx £26k, so a loss of £27k. To lease the same car over 4 years and 40k miles would cost £29k based on prices from Select Car Leasing
So a £2k saving if you have £53k in cash lying around and don't mind the hassle of selling the car after 4 years (which will net you less than the £26k dealer price of course). If you take PCP or HP to finance then there will be no difference in cost.
So why not lease as reduces your financial commitment to the minimum possible?
Glosphil said:
Bought a car at 10 months old with 12k miles for 70% of its list price. 33 months later Webuyanycar offered me £500 more than I paid for it. Can't see any PCP or lease deal beating the car buying me £500 to drive it for 33 months.
I don't think that adds anything at all to the discussion. Pretty sure the OP is comparing lease vs purchase of a NEW car. Second hand cars will always have depreciated significantly in normal times. Have you comparisons of leasing second hand cars, as I've never even seen one. Gassing Station | Car Buying | Top of Page | What's New | My Stuff