RE: PH Service History: To lease or not to lease

RE: PH Service History: To lease or not to lease

Author
Discussion

Gareth1974

3,408 posts

138 months

Sunday 21st January 2018
quotequote all
I took delivery of my first lease car, a VW Arteon R-Line DSG on Monday. 3+23 at £269, so £7000 for the two years, amortised it works out at £291.

10 days ago, I sold my previous car, a BMW 320d. I'd purchased the BMW at 6 months old, so it had already lost the worst chunk of depreciation. I paid £21900 for it, which was the cheapest price I could find nationally at the time. I had the first £10k of the purchase price, but paid £500 in interest to finance the remaining £12k. I sold it for £10850, so £11050 depreciation, plus interest = £11550. I owned the car for 30 months, so this give an amortised cost of £385 per month.

So I as far as I can see, by leasing I'm saving pretty much £100 a month, and this is compared to running a second hand, not new car, from a brand which doesn't depreciate as much as some - a colleague has just been offered £11k for a 2 year old Mondeo he paid over £30k for new - he's lost nearly £800 a month in deprecation!

I should also save in other areas - the road fund licence, which I had to pay previously is included in the lease, and when my BMW reached 3 years old, I began to pay for AA cover, included in the lease car. And the lease car came with brand new tyres, brakes etc, which of course were already part worn when I acquired the BMW.

My wife also got a good lease deal a few months back - Golf GTi for £5800 over 2 years.

givablondabone

5,475 posts

154 months

Sunday 21st January 2018
quotequote all
coljoh148 said:
Nil / low deposit Pcp in the other hand has never had an unsuspecting punter to the tune of thousands in neg-egg!?
GAP?

nickfrog

20,871 posts

216 months

Sunday 21st January 2018
quotequote all
Gareth1974 said:
I should also save in other areas - the road fund licence, which I had to pay previously is included in the lease, and when my BMW reached 3 years old, I began to pay for AA cover, included in the lease car. And the lease car came with brand new tyres, brakes etc.
Gareth, don't mention the opportunity cost though please as it upsets some people innit. wink

That's another £50 / month delta at 2.5% (typical mortgage) on a £30k Arteon so one may or may not choose to ignore that parameter in their benchmarking vs cash.

Edited by nickfrog on Sunday 21st January 12:18

Hairymonster

1,418 posts

104 months

Sunday 21st January 2018
quotequote all
Wow - listen to all the forum flamers!

Thanks for a straightforward concise article citing some good examples of PCP vs buying used. I do not agree that this is a lazy article, it provides an excellent reference point to people such as me who are constantly doing the man-maths behind PCP vs Owning outright.

Cheers

nickfrog

20,871 posts

216 months

Sunday 21st January 2018
quotequote all
The article is about leasing as far as I can tell though. It takes 5 examples where one would be mad to lease. And then draws a conclusion.

anonymous-user

53 months

Sunday 21st January 2018
quotequote all
givablondabone said:
Audemars said:
"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.
They'll be happy though cos they've got a 82" plasma.......................
Don't feed the obvious troll.

He has several £5m plus houses under his bridge.


Gareth1974

3,408 posts

138 months

Sunday 21st January 2018
quotequote all
Hairymonster said:
Wow - listen to all the forum flamers!

Thanks for a straightforward concise article citing some good examples of PCP vs buying used. I do not agree that this is a lazy article, it provides an excellent reference point to people such as me who are constantly doing the man-maths behind PCP vs Owning outright.

Cheers
The article isn't about PCP though! It's about leasing.

Fast Bug

11,595 posts

160 months

Sunday 21st January 2018
quotequote all
givablondabone said:
coljoh148 said:
Nil / low deposit Pcp in the other hand has never had an unsuspecting punter to the tune of thousands in neg-egg!?
GAP?
GAP covers you in the event of total loss such as write off or stolen. It doesn't cover negative equity

Hairymonster

1,418 posts

104 months

Sunday 21st January 2018
quotequote all
Gareth1974 said:
I took delivery of my first lease car, a VW Arteon R-Line DSG on Monday. 3+23 at £269, so £7000 for the two years, amortised it works out at £291.

10 days ago, I sold my previous car, a BMW 320d. I'd purchased the BMW at 6 months old, so it had already lost the worst chunk of depreciation. I paid £21900 for it, which was the cheapest price I could find nationally at the time. I had the first £10k of the purchase price, but paid £500 in interest to finance the remaining £12k. I sold it for £10850, so £11050 depreciation, plus interest = £11550. I owned the car for 30 months, so this give an amortised cost of £385 per month.
I think the PCP vs buying used favours the latter if you're buying at about 2 to 3 years old (rather than your 6 months) and intend to keep it for longer than 30 months. You effectively bought a 6 month old car at a 10k discount then flogged it when it was 3 years old - given the age of the car, you would have been far better off leasing it.

Gareth1974 said:
a colleague has just been offered £11k for a 2 year old Mondeo he paid over £30k for new - he's lost nearly £800 a month in deprecation!
Anyone paying 30k for a new Mondeo is asking for it! Again - this chap would have been far better off on a lease deal. If I bought his 2-year old cast-off for, say, £12k (with a bit of dealer profit) that would have been a good buy. With a hi-spec Mondeo with all the toys at over £30k you can find lightly-used demonstrators for serious savings off list price.

PCP is the obvious answer if you want a new car, and I can always see the attraction. In addition, it doesn't require you having to find the initial lump sum to buy the car, though of course you can always get a bank loan. A new car should, in theory, need nothing more than a few oil services and a few tyres in the first 2 or 3 years.

Edited by Hairymonster on Sunday 21st January 12:28

smudge71

10 posts

123 months

Sunday 21st January 2018
quotequote all
What a load of rubbish, comparing leasing with secondhand cars is pointless, the comparison should be between buying new and leasing new.

For years I’ve run secondhand performance cars and have been lucky, but it doesn’t take much to run up a repair bill for a few grand. My old Megane RS needed tyres, clutch, brake discs, air con all sorting out, nothing serious but still easily £2k down the drain. God forbid if I was to get a gearbox failure and face a £3k bill as has happened with a few. Instead now I’m spending about the same every month as I was on repairs, depreciation and road tax to drive a 67 plate Alfa Giulia Veloce and I have no regrets whatsoever, just have to treat it like it’s mine as I’ve heard horror stories about hand back costs at the end of the lease.

Also if you are fortunate enough to have £20k-£30k sloshing around to buy a car then I’m really pleased for you, however think about it sensibly - it’s a very poor use of capital, why put your life savings into a depreciating asset?

Leasing gives you the flexibility to invest capital in something that will make money, such as a house extension or if your savvy with share dealing.

As the famous expression says, if it flies floats or fornicates, rent it. Same could apply to cars.

It’s not a simple comparison, but I would say seek out the lease deals carefully, and don’t be tempted to tick any options, they’ll add the entire option cost onto the lease period on the assumption that it has no effect on resale value.

Also there is something very special about knowing your the only person to have sat in the drivers seat, if you ever saw the top gear episode when they did lab analysis of what was found in upholstery you’ll know what I mean.

It all depends on how much value you put on hassle free motoring and whether owning a new car is important to you.

Gribs

469 posts

135 months

Sunday 21st January 2018
quotequote all
Gareth1974 said:
I took delivery of my first lease car, a VW Arteon R-Line DSG on Monday. 3+23 at £269, so £7000 for the two years, amortised it works out at £291.

10 days ago, I sold my previous car, a BMW 320d. I'd purchased the BMW at 6 months old, so it had already lost the worst chunk of depreciation. I paid £21900 for it, which was the cheapest price I could find nationally at the time. I had the first £10k of the purchase price, but paid £500 in interest to finance the remaining £12k. I sold it for £10850, so £11050 depreciation, plus interest = £11550. I owned the car for 30 months, so this give an amortised cost of £385 per month.
Just so I can get any idea if this really is like for like, how many miles did the BMW cover? And what's the limit on the Arteon? It's also likely that the Arteon is likely to be being heavily subsidised to keep control of the residual values.

edc

9,230 posts

250 months

Sunday 21st January 2018
quotequote all
coljoh148 said:
edc said:
Is that a recent Ateca deal? Nothing like that around for that size or next size down.
Ordered Feb 17.

I just grab whatever's available dirt cheap that ticks the boxes, cheap 2nd car ideal.
Thanks. I'd stopped looking by then as picked up a deal in Nov 16. Starting to look again now for Nov 18.

saaby93

32,038 posts

177 months

Sunday 21st January 2018
quotequote all
Gribs said:
Gareth1974 said:
I took delivery of my first lease car, a VW Arteon R-Line DSG on Monday. 3+23 at £269, so £7000 for the two years, amortised it works out at £291.

10 days ago, I sold my previous car, a BMW 320d. I'd purchased the BMW at 6 months old, so it had already lost the worst chunk of depreciation. I paid £21900 for it, which was the cheapest price I could find nationally at the time. I had the first £10k of the purchase price, but paid £500 in interest to finance the remaining £12k. I sold it for £10850, so £11050 depreciation, plus interest = £11550. I owned the car for 30 months, so this give an amortised cost of £385 per month.
Just so I can get any idea if this really is like for like, how many miles did the BMW cover? And what's the limit on the Arteon? It's also likely that the Arteon is likely to be being heavily subsidised to keep control of the residual values.
and how long did it take to get the Aerton - some lease deals seem to be 6 months away when you want a car now

Gareth1974

3,408 posts

138 months

Sunday 21st January 2018
quotequote all
Gribs said:
Gareth1974 said:
I took delivery of my first lease car, a VW Arteon R-Line DSG on Monday. 3+23 at £269, so £7000 for the two years, amortised it works out at £291.

10 days ago, I sold my previous car, a BMW 320d. I'd purchased the BMW at 6 months old, so it had already lost the worst chunk of depreciation. I paid £21900 for it, which was the cheapest price I could find nationally at the time. I had the first £10k of the purchase price, but paid £500 in interest to finance the remaining £12k. I sold it for £10850, so £11050 depreciation, plus interest = £11550. I owned the car for 30 months, so this give an amortised cost of £385 per month.
Just so I can get any idea if this really is like for like, how many miles did the BMW cover? And what's the limit on the Arteon? It's also likely that the Arteon is likely to be being heavily subsidised to keep control of the residual values.
The Arteon is for 10k p.a. which is broadly in line with what I did in the BMW. It's 10p per mile if I go over - so I'd need to go over by 24000 miles to bring it up to the BMW cost.

It may well be that the Arteon is subsidised. But it's not really my concern if it is. I suppose it's little different to a manufacturer offering a discount off a new car purchase.

Nickbrapp

5,277 posts

129 months

Sunday 21st January 2018
quotequote all
Got a story quota to fill?

You’ve been lazy, Golf R are avaliable for much less than the price you have stated, at one point when everyone was going for them they where less than £300 a month, in some cases even less than that.

You’ve also missed that new cars tend to be less to insure than older models.

that leases include the road tax, so in lots of cases if you bought a used car, that would “save £1000 if it’s in the £500 a year tax bracket.

Plus you’re guaranteed not to have any repairs to pay for, which is possible with used cars but highly unlikely especially on aging M cars.

If people didn’t lease and PCP, where do you think the used stock of interesting cars would
Come from? People don’t often have 30k to spend buying a golf, but can easily spend £300 a month on one. Company cars are almost exclusively diesel.

Gareth1974

3,408 posts

138 months

Sunday 21st January 2018
quotequote all
saaby93 said:
Gribs said:
Gareth1974 said:
I took delivery of my first lease car, a VW Arteon R-Line DSG on Monday. 3+23 at £269, so £7000 for the two years, amortised it works out at £291.

10 days ago, I sold my previous car, a BMW 320d. I'd purchased the BMW at 6 months old, so it had already lost the worst chunk of depreciation. I paid £21900 for it, which was the cheapest price I could find nationally at the time. I had the first £10k of the purchase price, but paid £500 in interest to finance the remaining £12k. I sold it for £10850, so £11050 depreciation, plus interest = £11550. I owned the car for 30 months, so this give an amortised cost of £385 per month.
Just so I can get any idea if this really is like for like, how many miles did the BMW cover? And what's the limit on the Arteon? It's also likely that the Arteon is likely to be being heavily subsidised to keep control of the residual values.
and how long did it take to get the Aerton - some lease deals seem to be 6 months away when you want a car now
Roughly 3 months. I just aligned the sale of my BMW with the Arteon delivery, which I had some flexibility over anyway.

edc

9,230 posts

250 months

Sunday 21st January 2018
quotequote all
saaby93 said:
and how long did it take to get the Aerton - some lease deals seem to be 6 months away when you want a car now
Lease or purchase there is next to no difference in order time. If you want a car right now you either buy a stock car or cancelled order or buy second hand.

Gribs

469 posts

135 months

Sunday 21st January 2018
quotequote all
coljoh148 said:
Ordered Feb 17.

I just grab whatever's available dirt cheap that ticks the boxes, cheap 2nd car ideal.
Is splashing out £6k over 2 years really cheap for a second car? £6k would buy a 5 year old focus and if kept for 5 years you'd be looking at roughly £1k a year depreciation and under £1k a year in maintenance/servicing.

nickfrog

20,871 posts

216 months

Sunday 21st January 2018
quotequote all
saaby93 said:
and how long did it take to get the Aerton - some lease deals seem to be 6 months away when you want a car now
This has little to do with the method of payment. A used car on a forecourt is always going to be more instantly available than a car that doesn't exist yet. They don't call me Captain Obvious for nothing.



edc

9,230 posts

250 months

Sunday 21st January 2018
quotequote all
Gribs said:
coljoh148 said:
Ordered Feb 17.

I just grab whatever's available dirt cheap that ticks the boxes, cheap 2nd car ideal.
Is splashing out £6k over 2 years really cheap for a second car? £6k would buy a 5 year old focus and if kept for 5 years you'd be looking at roughly £1k a year depreciation and under £1k a year in maintenance/servicing.
On a 3+23 deal it would be circa £3k over 2 years. You have a brand new in warranty car which needs only one cheap first service. No RFL to pay. Get another similar current model car and see if you can run it for £3k over 2 years including depreciation when you sell it.