Sunday 21st January 2018

PH Service History: To lease or not to lease?

'For that price, you could get a...' is one of the most bandied-around phrases on PH. So, let's see how true it is.

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It's no secret that heaps of new cars are being sold (or should that be 'sold'?) on personal lease deals these days. And of course, the erudite readership of PistonHeads is frequently sensible enough to question the logic of owning a car in this way.

If one totals the cost of a full lease term, it's a remarkable amount of money - effectively, as we know, you're paying for the depreciation on the car while you use it without ever owning it. The positive is that this puts a choice of tempting new machinery within the reach of those who wouldn't otherwise stand a chance of affording it.

The downside, of course, is that spending that chunk of money on something used instead makes more sense financially - not least because you get to keep it longer than two years, should you wish, and even if you choose to get rid at that point you'll get some of your money back. And that seems like as good a reason as any to posit a few alternatives to some of the most popular new car lease darlings.

Let's start with the Volkswagen Golf R, shall we? Seemingly loved and loathed in equal measure by PHers, the hot Golf has become hugely popular thanks to some extremely tempting lease deals. This one, over on our sister site What Car?, will sit you behind the wheel of a Golf R for an initial rental just shy of two grand and monthlies of £326.80. That works out at a total cost of £13,398.

Now, for that you could find your way into a Mk5 Golf R32, but that seems a little... well... obvious, doesn't it? Instead, I rather fancy this hawkeye Impreza Type UK, with just 38,000 miles and a whopping great history. Yes, it's used, but barely, and it's a chance to own a proper legend of a car with the performance potential to rival that new Golf. And of course, you get the same four-wheel-drive all-weather ability.

Fancy something a little more potent? Course you do. How about a BMW M4? Another easy leaser, the M4 can currently be head with a down payment of £3277.38 over on What Car?, with monthlies of £546.23. Which is lovely, but for the £22,000 or so that three-year lease will cost you, you could get into a very tidy, low-mileage example of an E90 M3. And let's face it: that's just better, isn't it?

Take this one, for example: delightfully subtle looks, impeccably maintained, and mileage so low you could mistake it for a brand new example. Yes, it's on for £22,995, but I'm sure a bit of haggling would get it down to the cost of that M4 - and you'd get to keep it after three years. Which, let's face it, I reckon you'd want to.

But perhaps sir or madam fancies something a little more family-oriented? Don't think for a moment that means going without a few toys, though, because a large part of the reason you see so many Range Rover Sports flying around the place these days is their leasability. (Is that even a real world? Probably not. I'm using it anyway.)

Anyway, a Rangie Sport (or a Sporty Range, whichever you prefer) in the 'right' trim - 3.0 SDV6 HSE seven-seat, in my book - can now be yours for a down payment of £4,568.33 and a monthly rental of £761.39. As an aside, I can think of a fair few very nice ways of doing a big, luxurious family car for that down payment alone, but let's stick with our premise here and see what we can come up with for the £31,000 that total lease will set you back.

I was all set to throw you a common-or-garden diesel SUV here; something like an older Range Rover or a nice BMW X5. But then I spied this Audi Q7 V12 diesel for sale, and as this is PistonHeads, I simply had to give it a mention. These come up vanishingly infrequently, so even though it'll cost you the earth to fuel, and it's older and leggier than most of the other Q7s going for around its price, it's still a deeply appealing thing.

Before you're shot of me, here's just one more example. I've gone a little bit silly for this one, so you'll have to forgive me, but the fact is you can of course rent a bona fide supercar these days - and where would we be without the Audi R8 and its utterly delicious V10 engine? One of these will set you back £12,088.38 - that's just the down payment - with your monthlies over three years coming out at £2014.73.

All of which means a stonking total of £82,603.93 for the privilege of borrowing someone else's R8 for three years, and for the same money you could have your very own previous-generation V10; this one's barely two years old, has done a vanishingly small 13,000 miles, and I reckon it'll still be worth £60,000 or thereabouts in three years' time. No contest, really, is there?

[Wills2]

We don't need another stupid thread about leasing and pcps, it has been done to death.

Don't you read your own forum?

[Funk]

Wills2 said:

We don't need another stupid thread about leasing and pcps, it has been done to death.

Don't you read your own forum?

[topless360]

Remember though, the older car will cost more to run and maintain over 2/3 years and will still depreciate in most cases.

I’d still rather have the used car, but worth factoring in the running costs.

[Honeywell]

I’d like to see a more thorough and serious piece written on this topic. I’ve never leased but would be very interested in a series of thoroughly researched examples of the competing strategies.

[ukaskew]

This is a seriously lazy article that could've (and has on an almost daily basis) been knocked together by a forum member for free in a few minutes.

How about an actual investigation into the costs? The average running costs of the used option, the cost of the loan to buy it in the first place (I'm sure few considering a lease have £22k sat around to drop on a used car).

How about explaining the positives and negatives of each option, mileage limits, modability etc?

The only good thing to come out of this article is presumably an internal tick box to say you've pointed a bunch of hits towards deals that benefit the company in a small way.

[PenelopaPitstop]

Honeywell said:

I’d like to see a more thorough and serious piece written on this topic. I’ve never leased but would be very interested in a series of thoroughly researched examples of the competing strategies.

Follow this thread and soon enough you will become expert. https://www.pistonheads.com/gassing/topic.asp?h=0&...

People tend to ask the same questions all the time and there's plenty of useful knowledge, calculations, etc.

[hepy]

Last year there was a more in depth article in Car magazine covering the same topic.

Compared a brand new car on lease, to buying outright a 6-12 month old version of a similar or 'better' model.

Worth a read for anyone looking to lease.

[The Moose]

How about this as a slightly different take on this same (old) question.

If I am not mistaken, PH runs long term tests of older vehicles - why not see what those second hand vehicles cost to run over a 2 or 3 year period and then flip it around and see what that same money would buy you in a lease car.

Does that make sense?! (It's late and I've had a few drinks!!)

[classicyanktanks]

Wills2 said:

We don't need another stupid thread about leasing and pcps, it has been done to death.

Don't you read your own forum?

Thumbs up to this squire !

[coolchris]

To me the thought of paying a large downpayment then X amount a month to just have the privilege of driving a shiny new vehicle on the driveway has never appealed to me.It seems money for old rope to me.

Yes folk go on about 2nd hand cars are less reliable but its not the 70s anymore most modern ish stuff if maintained accordingly can prove very reliable.It really is horses for courses but for me it has always been a case of if I cant afford it I don't have it but I can see the appeal for some who are desperate to get into a dream car on a lease

[Camelot1971]

If you always get a new car every few years, leasing can make sense. If you keep your car for much longer than that, it doesn't. Manufacturer subsidies can make leasing very attractive - I've paid less for my Octavia VRS by leasing than if I bought it new as I only wanted it for 2 years.

The example of the R8 in the article is stupid - no one is going to pay over £80k to lease one.

[hammo19]

I looked into it once but stepped away when I understood the payments required based on your annual mileage....

[Audemars]

"The positive is that this puts a choice of tempting new machinery within the reach of those who wouldn't otherwise stand a chance of affording it."

PCP in a nutshell and 99% of pistonheaders.

They however will fight to the grave justifying how they can afford it despite living in crap houses with crap furniture and decor.

[crofty1984]

The Moose said:

How about this as a slightly different take on this same (old) question.

If I am not mistaken, PH runs long term tests of older vehicles - why not see what those second hand vehicles cost to run over a 2 or 3 year period and then flip it around and see what that same money would buy you in a lease car.

Does that make sense?! (It's late and I've had a few drinks!!)

I like this idea.

[anonymous-user]

Oh Christ, no. Not another one. Every bloody week there’s a stupid bloody circular argument about how people chose to pay for their motoring, and now PH themselves start one?

Also, the article itself wasn’t great and basically boiled down to “new cars are more expensive than used cars, especially if you tuck yourself up into a crap lease deal”.

Talk about a blinding flash of the obvious.

[r11co]

CLICK


BAIT

[Fast Bug]

There's a point, and yet again PH has missed it with one of their articles...

Certain cars you don't lease, such as an R8 as the desls never stack up. Yet the article never mentioned the £200 a month Golf R's that were around, or the £125 a month A4 deal, or the peanuts C4 Cactus deal. With the reight deals you pay less than you would in depreciation if you'd bought the car new.

And yes, used is less than new.

Most of the time.

Unless you get stuck with a big bill outside of the warranty period.

[wemorgan]

Fast Bug - I'm not sure this was meant as a serious and useful article, but just promotion for WhatCar revamped lease website.

[PorkInsider]

Yawn.

Lazy, crap journalism covering, in an utterly half-arsed fashion, a subject that has been debated to death for years, in much greater detail, by your forum members.

But then you don’t read the forums, do you..?

[vee5]

coolchris said:

To me the thought of paying a large downpayment then X amount a month to just have the privilege of driving a shiny new vehicle on the driveway has never appealed to me.It seems money for old rope to me.

Yes folk go on about 2nd hand cars are less reliable but its not the 70s anymore most modern ish stuff if maintained accordingly can prove very reliable.It really is horses for courses but for me it has always been a case of if I cant afford it I don't have it but I can see the appeal for some who are desperate to get into a dream car on a lease

I've had a lifetime of buying second hand cars privately so that I can assess the person who has been running it, and walk away if I don't like what I see.
My preference is a 3 year old car as it's done a lot of depreciating by that point and the mileage is still fairly low.

What bothers me about buying a 3 year old car now however is that its difficult to find them privately. Most have come off 3 year PCPs and are sat in dealers so I can't assess the previous owner, and the car will be selling at dealer rates rather than private.

In addition, I see many so many drivers nowadays booting their car down the road on a cold engine because they simply don't care about looking after their car - they'll hand it back at the end of term and it's under warranty in the meantime.

In my (possibly old fashioned) outlook, despite improvements in reliability, PCP owners driving behaviour coupled with extended oil change intervals doesn't bode well for a happy second hand experience.